Artificial intelligence (AI) has revolutionized all industries — from manufacturing to healthcare and finance — helping to streamline operations, increase productivity and elevate decision making.
As with any powerful tool, AI’s potential can also be harnessed for more malicious purposes. Cybercriminals are increasingly adopting AI to enhance the speed, precision and scale of their attacks, creating new challenges for businesses across the globe.
Organizations can stay resilient as this trend accelerates by rethinking their cybersecurity strategies and embracing cyber insurance as a critical component of their defence plan.
AI and cybercrime: How cybercriminals are weaponizing AI
AI has dramatically changed the landscape for cybercriminals, providing them with sophisticated tools to launch more devastating and efficient attacks.
AI is making cybercrime faster, harder to detect and more adaptive, allowing cybercriminals to bypass traditional security measures. In fact, the global cybersecurity market is expected to exceed $400 billion by 2026, driven by the growing threat of AI-enhanced cybercrime, according to Statista.
Some ways cybercriminals are weaponizing AI include:
AI phishing attacks
Cybercriminals’ phishing campaigns have previously relied on wide-scale, generic emails. Now, thanks to AI algorithms that quickly analyze social media profiles, online behavior and communication patterns, cybercriminals are increasingly creating convincing, highly personalized phishing messages that are difficult to distinguish from legitimate communication. The Canadian Centre for Cyber Security reported that AI-enhanced phishing attacks are expected to rise by 20% by 2025.
AI-generated malware
AI-enhanced malware can adapt its behavior in real-time, analyzing the target environment to avoid detection. For example, cybercriminals are using machine learning algorithms to create malware that quickly deciphers and responds to anti-virus and intrusion detection defence mechanisms to bypass these systems. In the U.S., ransomware attacks increased by 105% in 2023, with a significant portion attributed to AI-powered malware.
Deepfake AI technology
Cybercriminals are using AI-generated deepfakes — realistic but fake audio, video and images — for social engineering attacks. These convincing impersonations are more likely to manipulate a victim to share sensitive information. A recent Canadian Privacy Commission report highlighted a 30% rise in deepfake incidents from 2021 to 2023, often targeting high-level executives for fraudulent wire transfers or access to sensitive information.
AI-driven password cracking
Cybercriminals are using AI algorithms to accelerate password-cracking techniques, making it far more efficient than manual hacking attempts. AI can analyze patterns in password creation and apply machine learning to quickly guess passwords, especially for accounts with weak or common passwords. A 2022 Specops Software study found that AI can crack a weak password in under six minutes, whereas it can take days or weeks to crack strong, complex passwords.
AI botnets
AI enhances the capabilities of botnets — networks of infected devices that carry out coordinated attacks, such as Distributed Denial of Service (DDoS) attacks. In the U.S., DDoS attacks surged by 23% in 2023, with AI making these attacks harder to prevent.
AI cybersecurity: How businesses can adapt to evolving cyber risks
In the U.S., the financial sector experienced a 67% increase in cybersecurity incidents in 2023, with AI playing a significant role in automating attacks. Meanwhile, Europe and Asia-Pacific are seeing similar trends, with AI-enhanced attacks growing by 40% year-over-year.
As AI continues to reshape the cybercrime landscape, businesses of all sizes must evolve their cybersecurity strategies. This includes investing in advanced detection and response technologies that can keep pace with AI-enhanced threats.
Here are key measures that businesses can take to mitigate the risk of AI-powered cyberattacks:
Invest in AI-driven cybersecurity solutions
Just as cybercriminals are leveraging AI to enhance their attacks, organizations should invest in AI-driven cybersecurity solutions to strengthen their defenses. AI-powered tools can detect anomalies, identify patterns in large data sets and respond to threats in real time.
Implement advanced phishing defence mechanisms
AI-powered email security tools can detect the subtle nuances in phishing attempts that might go unnoticed by human users, such as minor changes in email addresses or phrasing that appears legitimate. Regular phishing simulations and training programs for employees are also crucial in raising awareness and helping users recognize phishing attempts.
Enhance multi-factor authentication (MFA)
Implementing MFA across all systems can significantly reduce the likelihood of unauthorized access, even if passwords are compromised. AI-driven authentication systems that analyze behavior — such as typing patterns, mouse movements or login locations — can further enhance security by flagging suspicious logins that deviate from a user’s typical behavior.
Deploy deepfake detection technology
AI-based deepfake detection tools can identify and block fraudulent content. These tools analyze various aspects of videos and audio — such as inconsistencies in visual or auditory cues — that might indicate manipulation. Training employees to recognize the warning signs of deepfakes and verifying communications through multiple channels can also prevent deepfake social engineering attacks.
Bolster incident response plans
Organizations should regularly review and update their incident response strategies to account for the growing complexity of AI-driven threats. Incident response teams must be equipped with the latest AI-based forensic tools to quickly identify the root cause of an attack and prevent further damage. Also, having a clear communication plan can help minimize reputational harm in a successful deepfake or phishing attack.
Regularly update and patch software
AI-powered malware is often designed to exploit unpatched vulnerabilities in software systems. Regularly updating and patching software — both on individual devices and across the network — is a simple but effective way to reduce the attack surface available to cybercriminals. Automated patch management systems can help organizations stay on top of critical updates, minimizing the window of opportunity for cybercriminals to exploit vulnerabilities.
Engage in continuous cybersecurity training
Employees are often the weakest link in cybersecurity. AI-enhanced attacks, such as personalized phishing or deepfake social engineering, prey on human error. To combat this, organizations should invest in continuous cybersecurity training programs that educate employees on the latest threats and teach them how to identify suspicious activity. Regular awareness campaigns, including simulated attacks, can help reinforce these lessons and keep cybersecurity top-of-mind for all employees.
Collaborate with an AI cybersecurity specialist
It can be difficult for in-house teams to keep up with the latest trends as AI-powered cyberattacks rapidly evolve. Partnering with cybersecurity experts — including certified AI cybersecurity specialists — can provide organizations with the knowledge and tools they need to stay ahead of cybercriminals. Experts can offer insights into emerging threats, assist with AI-based defense strategies and help fine-tune incident response plans to mitigate the risks of advanced cyberattacks.
The role of cyber insurance in the age of AI-powered attacks
Businesses can build a more resilient defence by complementing their cybersecurity efforts with comprehensive cyber insurance. Cyber insurance not only provides financial protection but also offers the resources necessary for recovery, legal compliance and reputation management.
Here’s how cyber insurance can protect businesses from AI-powered cyberattacks:
- Coverage for financial losses: Cyber insurance can cover the cost of lost revenue due to business interruption, ransomware payments, data restoration and system recovery. Allianz, a global insurance provider, reported that cyber incidents accounted for 42% of global business insurance claims in 2023, with AI-powered cybercrime being a leading factor.
- Incident response and recovery: AI-driven malware can spread quickly, causing widespread damage. Cyber insurance policies often include access to specialized incident response teams. A Ponemon Institute study found that companies with cyber insurance reduced their post-breach recovery time by 47%.
- Legal and regulatory support: After a cyberattack, businesses may face regulatory investigations and fines. Cyber insurance can cover legal representation, regulatory fines and compliance efforts. In 2022, regulatory fines in Canada related to data breaches increased by 25%, according to McCarthy Tétrault LLP.
- Reputation management: AI-generated deepfakes and other social engineering attacks can severely damage a company’s reputation. Cyber insurance can cover the costs of public relations efforts, helping businesses restore customer trust. The 2023 Edelman Trust Barometer Report showed that 68% of consumers would stop buying from a company after a major data breach, highlighting the critical need for reputation management.
- Forensic analysis: Following an AI-powered attack, forensic analysis is crucial for identifying the root cause and preventing future incidents.
Your best defence against AI-powered cyberattacks
The fusion of AI and cybercrime is creating an era of unprecedented risk for organizations.
Businesses must be prepared to defend against escalating threats as cybercriminals exploit AI to launch increasingly sophisticated attacks.
This demands a combination of heightening cybersecurity best practices by utilizing advanced technology, robust processes and continuous vigilance.
Cyber insurance offers a critical layer of protection, helping organizations recover quickly, minimize financial losses, and navigate the legal and reputational fallout of AI-driven cyberattacks.
In the age of AI, a proactive and comprehensive approach to cyber risk management is essential for long-term resilience and business success.
Aliya Daya, Senior Client Executive, serves as a Cyber Technical Specialist and National Mixed Specialties Practice Team Lead at Acera Insurance. With more than 25 years’ experience in the insurance industry, Aliya specializes in innovation, technology, cyber insurance and privacy breach, political risk, manufacturing/fabrication/wholesale/distribution, hospitality, non-profit and faith-based organizations, as well as disruption and emerging industries. You can reach Aliya at 403.717.5895 or [email protected].