Identity fraud could be quickly becoming the next major challenge for businesses, with 59 per cent of firms reporting these types of attempts increasing compared to one year ago, according to new research.
The findings come from a new identity fraud report from digital identity and fraud prevention solution provider Signicat and cybersecurity training firm Red Goat Cyber Security.
Despite new challenges emerging, the report, ‘Battle in the Dark 2025‘, finds that most European businesses remain confident. However, this confidence may be misplaced. Businesses estimate that 19 per cent of transactions are fraudulent, yet 74 per cent say they are confident in their ability to protect themselves against identity fraud. This confidence is despite 59 per cent seeing a rise in successful identity fraud attempts.
But not all firms are so optimistic about the future. Around 80 per cent argue that pushing back against fraudsters just results in them changing their tactics and presenting new cybersecurity challenges. In the face of rising identity fraud attempts, the report finds that 22 per cent of annual business revenue is impacted by both identity fraud and the cost of trying to prevent it.
So what’s going wrong? Signicat argues that without consistently tracking fraud, and failing to measure the impact that fraud has on the business, there is ‘no hope’ of controlling the problem. Yet 47 per cent and 55 per cent fail to utilise these two strategies, respectively.
“This research highlights a worrying trend: businesses trust their ability to fight fraud, yet don’t truly understand where or how it’s hurting them,” said Pinar Alpay, chief product and marketing officer at Signicat. “The first step in fighting back is to understand the threat – how it is targeting your business and where it is seeing success. Without that knowledge, businesses are fighting blind.”
Identity insights
The report also looks in detail at the tactics used to commit identity fraud, and finds that ID document forgery remains widespread across all industries. Seventy-one per cent agree that AI enables most fraud against them, attackers are using new technologies to conduct standard, cost-effective attacks with more sophistication and at scale, rather than inventing novel techniques.
The costliest methods of attack, however, are account takeover and social engineering attacks. These forms of fraud exploit weak customer security practices, and detection is also challenging, as transactions can appear legitimate until reports by the customer.
“The pace at which identity fraud is evolving is unlike anything we’ve seen in recent years. What was once the domain of opportunistic criminals has become a sophisticated, scalable and worryingly accessible business – often powered by the same AI tools driving innovation across legitimate sectors, added Lisa Forte, partner at Red Goat Cyber Security. “Confidence is a dangerous attitude to have in cybersecurity and fraud; account takeover and Synthetic ID fraud aren’t abstract threats. They’re happening now, and they’re targeting the same businesses that believe they have strong controls in place.”
In the face of these challenges, 90 per cent of organisations agree that their use of AI is helping to stay ahead of emerging threats, aligning with trends seen across the cybersecurity and anti-fraud space.
