The Growing Threat of Deepfakes: How CSOs are the Hero in this Scary Story
Maybe the first time you encountered a deepfake it was Nicolas Cage’s face being put on Jennifer Lawrence's body.
Funny, right? It seems harmless enough.
So, what does deepfake technology have to do with you and your organization’s bottom line? EVERYTHING. In fact, at the start of 2024, a survey of executives indicated that deepfakes ranked among their top five security concerns. Deepfakes are anything but harmless to an organization, and, in fact, they have the potential to plunge an organization into a very scary story.
Deepfakes and YOUR Bottom Line
The financial and strategic implications of deepfakes are increasingly critical. Beyond reputational harm, deepfakes can impose substantial financial losses on businesses, disrupt their operations, and even influence stock prices. The involvement of a Virtual Chief Security Officer (CSO) is essential to navigate these risks and protect an organization's economic interests.
Here are five ways deepfakes can impact your organization:
Financial Losses from Direct Attacks: Deepfake-related fraud is already responsible for significant financial loss. In recent cases, deepfakes have been used to impersonate CEOs and other executives, directing employees to transfer funds to fraudulent accounts. One example in 2024 involved a deepfake of the CFO at a British engineering firm, which led to a transfer of $25 million to an attacker’s bank account
Operational Disruptions and Resource Drain: The sophistication of deepfake attacks can also disrupt regular operations and drain resources. When organizations are hit by deepfake fraud, they often need to divert considerable time, manpower, and finances to investigate and remediate the breach. Resources are required to scrutinize digital content for authenticity, which can slow down critical business processes. For example, Europol warns that as detection and investigation of deepfakes become more demanding, organizations may need to allocate more of their cybersecurity budget to monitoring and defending against this single threat type
Market Manipulation Risks and Stock Price Volatility: Deepfakes also have shown potential to manipulate markets, affecting stock prices and shareholder confidence. For instance, a fabricated video showing an explosion near the Pentagon briefly disrupted U.S. markets, causing dips in stock values. Such incidents highlight how deepfakes could be used maliciously to influence investor decisions and harm corporate valuation. This threat of deepfake-driven stock manipulation underscores the need for CSOs to develop a coordinated media monitoring strategy to detect and respond to suspicious content that could mislead investors or impact market confidence.
Strategic Adjustments and Long-Term Security Investment: To mitigate these financial risks, businesses are increasingly revisiting their long-term strategies to account for deepfake defenses. A survey found that 80% of companies lack clear protocols for managing deepfake attacks. To close this gap, CSOs are guiding organizations to allocate resources towards AI-based deepfake detection, employee training, and biometric verification methods as part of their strategic priorities. Furthermore, deepfake prevention requires a shift towards a zero-trust security model, which not only strengthens defenses against impersonation but also enhances data protection across the board.
Deepfakes pose a substantial risk to a company’s bottom line by generating direct financial losses, increasing operational costs, and impacting stock prices. They also require strategic reallocation of resources toward more advanced security measures. By focusing on proactive detection, real-time response protocols, and employee training, CSOs can help protect an organization's financial stability and position it to respond effectively to this emerging threat.
How Deepfakes Are Used in Scams
Deepfakes are being used by scammers to deceive victims into believing the deepfake is real, leading to significant financial and reputational harm. Here are some of the ways they’re being used:
CEO Impersonation and Financial Fraud: One of the most common uses of deepfakes in scams is to impersonate CEOs or other high-ranking executives in Business Email Compromise (BEC) attacks. Scammers create videos or audio that appear to be from a company leader instructing employees to make urgent financial transactions. In a notable case, deepfake technology was used to impersonate a CEO, resulting in the transfer of $243,000 to fraudulent accounts.
Voice Cloning for Social Engineering: Deepfake audio technology, or voice cloning, allows scammers to create convincing voice messages that sound exactly like the person being impersonated. This has been used to impersonate family members in emergency scams, convincing victims to wire money or provide sensitive information urgently. For instance, AI voice cloning has been reported in schemes where criminals used a cloned voice of a CEO to instruct finance employees to make wire transfers.
Video Calls and Live Deepfake Scams: Real-time deepfake tools allow scammers to participate in live video calls under the guise of someone else. This is particularly concerning in remote work environments, where verifying identity over video calls is challenging. In one case, a fake CFO conducted a video call to authorize a large wire transfer, convincing the finance team the transaction was legitimate.
Stock Market Manipulation: Deepfakes can also impact markets. Fabricated videos that falsely report a crisis or event, such as a fake explosion or scandal involving a major corporation, can cause stock prices to drop temporarily. This tactic, used by sophisticated scammers, is intended to manipulate stock prices and profit from resulting market movements.
Through impersonation, urgent requests, and real-time engagement, deepfakes allow scammers to create highly convincing narratives, making it difficult for victims to identify fraud. Addressing these threats requires businesses to adopt strong verification protocols, including multi-layer authentication and specialized detection tools, as a safeguard against the misuse of deepfakes in scams.
A Widespread Vulnerability
Deepfakes present a fundamental challenge to organizations. They can be weaponized for sophisticated phishing schemes, including real-time impersonations during video calls and voice-based phishing (vishing) that bypass standard authentication. They are an evolving cyberattack vector according to The National Security Agency (NSA) and Cybersecurity and Infrastructure Security Agency (CISA) who have both noted an exponential rise in deepfake-enabled attacks targeting key sectors, with 400 companies worldwide affected by CEO impersonation scams each day. Yet, despite the evidence of the high level of risk, as of 2024, only 5% of businesses reported having robust deepfake detection systems in place, leaving a large percentage of organizations vulnerable to financially devastating attacks.
A CSO’s role here is to prioritize zero-trust security frameworks and to establish incident response protocols specific to deepfake detection and response. By integrating real-time monitoring of high-value communications, CSOs can help detect anomalies and intervene before any potential fraud escalates.
Key Actions
So, how can CSOs address the deepfake threat?
Invest in Advanced Detection Tools: Use deepfake detection technology, including facial recognition and AI-based analysis, to identify inconsistencies in video and audio media. Tools like Google’s SynthID and blockchain verification systems add an extra layer of protection.
Strengthen Multi-Factor Authentication (MFA): CSOs should guide the organization toward multi-layered authentication, including biometric verification. Live, on-camera verification tasks can also help identify deepfakes by requiring interaction that pre-recorded, or AI-manipulated content can’t replicate.
Enhance Employee Training: Establish training programs focused on deepfake awareness for employees in high-stakes roles, particularly in finance, executive management, and HR. Regularly conducted deepfake simulation exercises can also build vigilance.
Update Incident Response Protocols: Traditional incident response plans must be updated to address deepfake incidents specifically. A deepfake response protocol should include verification processes for suspicious communications and a clear escalation path when anomalies are detected.
Integrate Zero-Trust Principles: Adopting a zero-trust framework mitigates risks by continuously verifying user identities and permissions across all access points. By verifying devices and users at each stage, organizations can better protect themselves from deepfake-assisted breaches.
Collaborate with Legal and Compliance Teams: CSOs should work with compliance teams to keep pace with new regulations around synthetic media, ensuring that security and compliance frameworks are fully aligned. Documentation of all security protocols related to deepfake defense is critical for legal protection and regulatory compliance.
Conclusion
Deepfake technology presents a formidable and complex challenge, capable of impacting corporate reputations, destabilizing markets, and eroding trust in digital interactions. As a result, the role of the CSO is more critical than ever. Through advanced detection systems, enhanced verification processes, and robust incident response protocols, CSOs can fortify an organization’s defenses against this rapidly evolving threat.
For any business, ignoring the reality of deepfake threats is no longer an option. In today’s digital environment, security must be proactive, adaptive, and relentless, qualities that make a CSO the hero of any story no matter how scary.