A surge in expense fraud is the latest alarming AI-related trend, with new tech making the hustle accessible for many more employees and threatening to eat even more of earnings, the Financial Times reported.

AI is making the process too easy: Forgeries that used to require skillful photo editing or bribery in the past are now an AI prompt away through chatbots from OpenAI and Google. Image generation software can now easily produce realistic images of expense receipts, complete with signatures and wrinkled paper visuals, sometimes proving too realistic to detect by humans.

More prevalent than you think: Some 70% of surveyed chief financial officers think employees are already using AI to falsify expenses, while 10% are sure this is happening in their company, the salmon-colored paper cited research by SAP Concur. AI-faked receipts amounted to some 14% of fraudulent documents in September, according to AppZen data, while a new software by fintech Ramp caught over USD 1 mn in fake invoices within 90 days.

“This isn’t a future threat; it’s already happening,” expense management platform Rydoo’s Sebastien Marchon told the FT, noting that while the percentage of AI-generated receipts out of non-compliant filed receipts might be small now, “this is only going to grow.” A rise in faked expense reports can lead to a dramatic increase in expense fraud-related income loss, estimated in 2024 to cost US businesses a median of USD 50k a year.

Fighting fire with fire: Companies are now turning to — you guessed it — AI tools to detect fake receipts. Scanning for image metadata and analyzing contextual information, as well as comparing receipts to authentic ones from the same vendor to detect slight changes in font or spacing, can reveal an image was faked and by which tool.

BUT- There are ways to fly under the radar of these tools as well. “It’s a cat-and-mouse game,” AppZen’s CEO Anant Kale told the New York Times.

MARKETS THIS MORNING-

Asian markets are mostly in the red this morning, with Japan’s Nikkei inching down 0.4%, while Hong Kong’s Hang Seng is down 0.1% in early trading. Over on Wall Street, futures are unchanged following a day of record highs for major indexes.

EGX30

38,162

+0.2% (YTD: +28.3%)

USD (CBE)

Buy 47.37

Sell 47.50

USD (CIB)

Buy 47.40

Sell 47.50

Interest rates (CBE)

21.00% deposit

22.00% lending

Tadawul

11,620

+0.2% (YTD: -3.5%)

ADX

10,192

-0.1% (YTD: +8.2%)

DFM

6,041

-0.4% (YTD: +17.1%)

S&P 500

6,875

+1.2% (YTD: +16.9%)

FTSE 100

9,654

+0.1% (YTD: +18.1%)

Euro Stoxx 50

5,711

+0.6% (YTD: +16.7%)

Brent crude

USD 65.46

-0.2%

Natural gas (Nymex)

USD 3.37

-2.1

Gold

USD 4,009

-0.3%

BTC

USD 114,094

-0.5% (YTD: +22.1%)

S&P Egypt Sovereign Bond Index

950.90

+0.1% (YTD: +22.3%)

S&P MENA Bond & Sukuk

152.49

0.0% (YTD: +9.0%)

VIX (Volatility Index)

15.79

-3.5% (YTD: -9.0%)

THE CLOSING BELL-

The EGX30 rose 0.2% at yesterday’s close on turnover of EGP 5.9 bn (27.9% above the 90-day average). International investors were the sole net sellers. The index is up 28.3% YTD.

In the green: Raya Holding (+4.2%), Orascom Development (+2.9%), and Beltone Holding (+2.6%).

In the red: Egypt Aluminum (-5.9%), Misr Cement (-2.1%), and Arabian Cement (-1.9%).

CORPORATE ACTIONS-

Alexandria Container & Cargo Handling Company will distribute dividends of USD 0.0034 and EGP 1.81 for its FY 2024-2025 earnings, to be paid on 13 November.

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