Identity fraud is evolving into a global issue, growing both in frequency and complexity. Data from identity verification specialist Sumsub reveal that identity fraud incidents have more than doubled in the past three years, with account takeovers and deepfakes emerging as major concerns. Financial services have become a prime target.
Between 2021 and 2024, identity fraud rates increased from 1.1% to 2.6% of all verifications analyzed worldwide by Sumsub, marking a staggering 136.4% increase. Notably, account takeovers witnessed a remarkable increase, increasing by 250% year-over-year (YoY) on a worldwide basis. Deepfake cases grew even more significantly, surging fourfold between 2023 and 2024 to account for 7% of all fraud attempts.
Among industries, financial services were hit the hardest. Banking and insurance, as well as cryptocurrency ranked among the top five most targeted sectors in 2024, with fraud rates of 2.7% and 2.2%, respectively.
The rise of AI-driven fraud
A separate study by security solution provider Entrust and Docusign, which surveyed over 1,400 organizations globally in Q4 2024, found similar trends. More than two-thirds (69%) of the companies polled reported an increase in fraud attempts over the year, reflecting booming identity fraud activity.
Like Sumsub’s findings, the data show that the growing role of AI in enabling fraud. In the past year, digital document forgeries, often created with generative AI (genAI), increased by a staggering 244%, according to Entrust’s 2025 Identity Fraud Report. Deepfakes now account for 40% of all biometric fraud detected.
Similarly, Signicat’s 2024 report on AI-Driven Identity Fraud found that 42.5% of fraud attempts are now AI-driven, with deepfakes representing 6.5% of total fraud attempts. The figure marks a staggering 2,137% increase over the past three years.
The financial sector is particularly at risk, with an alarming 37.4% of all deepfake attacks directed at the industry. Deloitte’s Center for Financial Services estimates that AI-generated content enabled fraud losses to reach more than US$12 billion in the US in 2023, a figure which could reach US$40 billion by 2027, representing a compound annual growth rate (CAGR) of 32%.
Technology as a key defense
Despite the escalating role of AI in identity fraud, many organizations see the technology as a vital tool in fighting back. In the Entrust and Docusign study, 82% of respondents expressed confidence that genAI will be more effective than their current methods at reducing customer fraud risk.
Overall, 70% of organizations believe that investing heavily in technology solutions is the best way to mitigate the financial risk of identity fraud, with 74% planning to invest more in identity verification in the future.
Early adopters of advanced identity verification technologies are already seeing results. On average, organizations using identity verification reported saving over US$8 million in total by preventing identity fraud. Among those that have invested significantly more in identity verification than their industry peers, 63% believe that the steps they took to prevent identity fraud have had a positive impact on their brand.
The cost of identity fraud
Identity fraud is becoming an increasingly costly threat for organizations. The Entrust and Docusign research estimates that each year, businesses lose an average of US$7 million because of identity-related fraud. A significant portion of organizations, 41%, reported direct losses exceeding US$1 million, while 15% also reported indirect losses of more than US$1 million. The banking and finance industry was found to be the most impacted, with 51% reporting annual direct costs over US$1 million.
Direct costs typically involves chargebacks and refunds, while indirect costs are associated with dedicating valuable employee resources to identify and remedy fraudulent transactions and address brand, as well as reputational damage.
The research found that the financial impact of identity fraud is particularly severe for larger organizations. On average, businesses with over 5,000 employees have an annual direct identity fraud cost of US$13 million. Additionally, a significantly higher proportion, 28%, have an annual indirect identity fraud cost over US$1 million.
These costs grow by multiples as the size of organizations increase. Among organizations with over 10,000 employees, 20% have annual direct and indirect identity fraud costs over US$50 million.
Identity fraud in APAC
In Asia-Pacific (APAC) where digital growth is accelerating, identity fraud continues to grow at an alarming rate. Data from Sumsub reveal that the region saw a staggering 121% YoY increase in identity fraud in 2024, with Indonesia being the hardest hit by witnessing a fraud rate of 6.02%.
Among the APAC region, the strongest growth was seen in Singapore, with a 207% surge, emphasizing how even highly developed markets in the region are vulnerable to increasingly complex fraud schemes.
This surge can be in part explained by Singapore’s push toward becoming a cashless society. This push has led to the widespread use of digital wallets, QR code payments, and contactless transactions, introducing new avenues for fraud and vulnerabilities for criminals to exploit, among which fake payment apps, fraudulent QR codes, and the theft of digital wallet credentials, the report says.
Similarly to global trends, deepfake fraud also increased significantly in APAC, recording a 194% YoY in 2024. The region is also grappling with the increasing use of money mules, with individuals under the age of 25, in particular, being most susceptible to acting as mules.
Echoing global trends, Sumsub data reveal that financial services are the most affected industry in APAC. In 2024, trading platforms led identity fraud rates with a 4.8% share, followed closely by the fintech sector at 4.5%. In particular, identity fraud in the fintech sector doubled between 2023 and 2024, reflecting the aggressive growth observed in fintech across APAC.
Featured image credit: edited from freepik
