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Enacy Mapakame
Experts in capital markets have warned listed firms across the region to keep a watchful eye on the evolving technology especially artificial intelligence (AI) which is seen as the biggest threats in 2024.
Despite its transformative abilities, AI also has potential to create synthetic media and manipulate markets, according to African Financials.
Generative AI technology has ability to create fake images, videos, and text reach new heights in realism, efficiency and accessibility, and can be weaponised to erode public trust and manipulate perceptions.
This has seen cyberattacks, AI misinformation and disinformation, deepfakes and phishing scams increase across the globe.
Last year, Victoria Falls Stock Exchange (VFEX) listed food processing giant, National Foods Limited, fell victim to scammers with about US$6 million siphoned from the company into some South African banks. The fraudsters reportedly accessed the company’s computer systems, including authorisation of transactions.
As technologies such as AI continue to gain traction world over, they also pose serious threats to businesses and individuals at risk of being deepfaked.
“Stock markets everywhere rely intrinsically on public trust and confidence. If that erodes, markets can be significantly disrupted.
“While African capital markets have not yet seen significant fake news and misinformation issues, the writing is on the wall,” reads part of an African Financials report seen by The Herald Finance and Business.
A Cyber Security Report 2021, which shows the state of the threat in Kenya, South Africa and Zimbabwe, the most common cyber security threats cited were malware, web-application attacks, email phishing and impersonation, identity theft, data breaches and denial of services.
The report also notes that an estimated 82 percent of businesses in Zimbabwe said they experienced threats as cybercriminals take advantage of the growing digitalisation to attack digital infrastructure.
This could worsen with the generative AI technology increasingly gaining traction.
According to the World Economic Forum (WEF), misinformation powered by AI is already being seen as one of the biggest threats of 2024. This is after extreme weather conditions, which is ranked as the highest perceived risk on a global scale, followed by AI generated misinformation, then societal and political polarisation. Cost of living crises, cyberattacks and economic downturn complete the top six perceived risks.
The African Financials report further highlights that while direct manipulation of stock prices via fake news has not emerged as a major issue in Africa, that could change quickly as markets become more liquid.
It has become cheaper and easier to manipulate media and harder to identify manipulated media in the modern information environment, so, without vigilance, this could open the door to fake news being used to manipulate share prices on African exchanges in the future.
“Listed companies on African exchanges need to prepare now for this coming storm,” said the capital markets experts.
Now, the best defense that listed companies have is open, honest, consistent and persistent communication directly with stakeholders.
Trust will be fostered by building durable two-way connections with stakeholders and diligently publishing accurate, contextual information on company activities, performance, strategy, and sustainability initiatives.
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