Small Businesses Face Rising Threats from AI-Driven Scams

A recent survey by Nationwide highlights the increasing threat of AI-driven scams targeting small businesses across the U.S. One-quarter of small business owners reported being subjected to scams involving generative AI technology. These scams often take the form of impersonation attempts through email, voice, or even video, aimed at defrauding businesses by posing as senior executives or business owners. Alarmingly, over half of the surveyed owners admitted they had been fooled by deepfake technology within the past year, and nearly 90% expressed concerns about the growing sophistication of AI-powered scams.

Despite the heightened awareness, many small businesses remain unprepared to fully address these risks. While 66% of owners feel confident in their ability to recover from a cyberattack, only 42% have cyber insurance to back up their preparedness. The disconnect between confidence and actual risk mitigation is a serious issue, with many owners underestimating the potential financial impact and duration of recovery from a cyberattack. Nationwide’s data reveals that the average recovery costs for a small business cyberattack can range from $18,000 to $21,000, much higher than what most owners anticipate.

The rise in cyberattacks driven by generative AI has led to a critical need for comprehensive cybersecurity strategies. Small business owners are advised to invest in cyber insurance, maintain updated incident response plans, and stay informed about evolving cyber threats. This proactive approach can help safeguard their operations and financial health against these increasingly sophisticated scams.