AI has been used to create deep fake images, voices and videos. Researchers believe that it may soon be impossible to tell the difference between a real person and a fake. "Criminals used artificial intelligence-based software to impersonate a chief executive's voice and demand a fraudulent transfer of €220,000 ($243,000) in March in what cybercrime experts described as an unusual case of artificial intelligence being used in hacking. The CEO of a U.K.-based energy firm thought he was speaking on the phone with his boss, the chief executive of the firm's German parent company, who asked him to send the funds to a Hungarian supplier. The caller said the request was urgent, directing the executive to pay within an hour, according to the company's insurance firm, Euler Hermes Group SA. Euler Hermes declined to name the victim companies. Law enforcement authorities and AI experts have predicted that criminals would use AI to automate cyberattacks. Whoever was behind this incident appears to have used AI-based software to successfully mimic the German executive's voice by phone. The U.K. CEO recognized his boss' slight German accent and the melody of his voice on the phone, said Rüdiger Kirsch, a fraud expert at Euler Hermes, a subsidiary of Munich-based financial services company Allianz SE. Several officials said the voice-spoofing attack in Europe is the first cybercrime they have heard of in which criminals clearly drew on AI. Euler Hermes, which covered the entire amount of the victim company's claim, hasn't dealt with other claims seeking to recover losses from crimes involving AI, according to Mr. Kirsch."

By now execs should be aware of the threat of email fraudsters impersonating them to instruct subordinates to wire funds to a scammer's account. But now they also need to watch out for phone hustlers, aided by artificial intelligence that spoofs the voice of CEOs. Deepfake videos depicting politicians like Barack Obama saying things he never did have sparked concerns over their potential for messing with elections and causing social chaos. But one use of the same technology is simple fraud. And in recent years the most lucrative fraud targeting businesses is carried out by spoofing the email account of a CEO (or some other trusted or authoritative person) who instructs a subordinate, such as a financial controller, to wire funds to a fraudster's account.

It seems like every few days there's another example of a convincing deepfake going viral or another free, easy-to-use piece of software (some even made for mobile) that can generate convincing video or audio that's designed to trick someone into believing a piece of virtual artifice is real. But according to The Wall Street Journal, there may soon be serious financial and legal ramifications to the proliferation of deepfake technology. The publication reported last week that a UK energy company's chief executive was tricked into wiring €200,000 (or about $220,000 USD) to a Hungarian supplier because he believed his boss was instructing him to do so. But the energy company's insurance firm, Euler Hermes Group SA, told the WSJ that a clever AI-equipped fraudster was using deepfake software to mimic the voice of the executive and demand his underling pay him within the hour. "The software was able to imitate the voice, and not only the voice: the tonality, the punctuation, the German accent," a Euler Hermes spokesperson later told The Washington Post.

Criminals have impersonated a chief executive's voice using artificial intelligence-based software to deceive an unnamed UK-based CEO into making a fraudulent transfer of £200,000 according to a report in the WSJ. WSJ's Catherine Stupp reported that: "The CEO of a UK-based energy firm thought he was speaking on the phone with his boss, the chief executive of the firm's German parent company, who asked him to send the funds to a Hungarian supplier. The caller said the request was urgent, directing the executive to pay within an hour, according to the company's insurance firm, Euler Hermes Group SA. Euler Hermes declined to name the victim companies." Rüdiger Kirsch, a fraud expert at Euler Hermes, a subsidiary of Munich-based financial services company Allianz SE was reported as saying that the UK CEO recognised his boss' slight German accent and the melody of his voice on the phone.

Fear is holding back small businesses from trading internationally, according to a report from HSBC late last year. Specifically, a lack of international business knowledge and experience has small suppliers reluctant to step onto the global stage. Stepping onto the international market means exposure to new types of risk, including the risk of non-payment from a foreign, unfamiliar corporate client. Euler Hermes is just one company aiming at this space, providing businesses with trade credit insurance. Earlier this month the company launched a partnership with analytics-as-a-service company Flowcast to integrate artificial intelligence into the trade credit insurance process.