- Deepfakes driven by evolving AI-based techniques have become more advanced to the extent that businesses across all industries face new security challenges.
- According to Signicat’s report, 42.5 percent of fraud attempts detected in the financial sector are now due to AI
Financial institutions are facing a significant increase in artificial intelligence (AI)-driven fraud attempts, growing by 2,137 percent in the last three years, according to data from Signicat.
The Battle Against AI-Driven Identity Fraud report details how deepfakes have become more advanced to the extent that businesses across all industries must reconsider their security strategies to address one of the most serious forms of identity fraud in today’s landscape.
“Fraudsters are using AI-based techniques that traditional systems can no longer fully detect,” said Pinar Alpay, Chief Product & Marketing Officer, Signicat. “Organizations should consider advanced detection systems that combine AI, biometrics and identity verification to protect against these threats.”
AI Identity Fraud
The study, the first to focus on AI-driven identity fraud, highlights that deepfake technology has become one of the three most common types of identity fraud in the financial and payments sector across Europe. Deepfakes use artificial intelligence to create highly realistic digital forgeries. Their rapid growth is prompting urgent discussions about improving companies’ fraud prevention capabilities.
Over 1,200 respondents from the financial and payment sectors across seven European countries, including the UK, stated that account takeover is the leading type of fraud their customers are exposed to, followed by card payment fraud and phishing.
Two Types of Deepfake Frauds
The evolving deepfake technology has enabled two main types of attacks: Presentation and Injection attacks. Presentation Attacks include fraudsters wearing masks and makeup to spoof another person, where the camera films another screen showing a deepfake in real-time, targeting activities such as account takeovers or fraudulent loan applications.
An Injection attack is a result of malware or untrusted input deliberately inserted into a program, compromising its integrity or functionality. Examples of these attacks include pre-recorded videos, often during onboarding processes that banks, fintech companies, or telecommunications companies are subjected to.
Targeting Financial Institutions
These forgeries have become more widespread and harder to identify, which has contributed to their rise as one of the main methods of identity fraud. According to Signicat’s report, 42.5 percent of fraud attempts detected in the financial sector are now due to AI. Three years ago, deepfakes were not even a significant statistical occurrence and today it is the most common type of digital identity fraud faced by companies, according to Alpay.
“Three years ago, deepfake attacks were only 0.1 percent of all fraud attempts we detected, but today, they represent around 6.5 percent, or 1 in 15 cases,” she said. “This represents an increase of 2137 percent in the last three years, which is alarming.”
Despite the increase in AI-driven fraud attempts, including deepfakes, only 22 percent of financial institutions have implemented AI-based fraud prevention tools. This gap leaves many companies vulnerable to more sophisticated attacks.
“A multiple detection setup is crucial. By combining early risk assessment, robust identity verification and authentication methods based on facial biometrics, and ongoing monitoring, companies can better protect both their operations and their customers,” Alpay said.
Fighting Back Against AI
The steep rise in deepfake fraud is part of a broader trend of AI-driven identity fraud, as cybercriminals increasingly leverage advanced technologies to exploit financial systems. Signicat’s report makes an urgent call to action for financial institutions and businesses alike to proactively strengthen their cybersecurity measures.
By updating fraud detection systems, improving employee and customer awareness, and investing in AI-based fraud prevention solutions, organizations can stay ahead of these rapidly evolving threats and protect both their operations and their customers.
“Orchestration of these tools in the optimal combination is the essence of a multi-layered protection,” said Alpay.