The use of deepfakes in identity fraud has seen a significant increase in 2023, with threat actors utilizing this technology ten times more than in 2022, according to the latest report by Sumsub, a digital identity verification solutions provider.
In their third annual Identity Fraud Report, released on November 28, 2023, Sumsub identified artificial intelligence-powered techniques as one of the top five tools used for online fraud in 2023. The surge in deepfakes accounted for the majority of AI-powered fraud techniques reported by the company.
During a recent Sumsub event on AI regulation in London, Ilya Brovin, the firm’s chief growth officer, highlighted the growing sophistication of identity fraud. He mentioned that while AI and deepfake tools are becoming more accessible, many fraudsters using these techniques are part of organized groups, rather than individual actors.
The report revealed that the use of deepfakes for identity fraud has increased significantly in regions like North America and Asia-Pacific, with a 1740% and 1530% rise, respectively. In the Middle East and Africa (MEA) and Latin America, there was a 450% and 410% increase in deepfake usage for fraudulent activities.
The cryptocurrency sector emerged as the primary target for AI-powered fraud techniques, representing 88% of all deepfake cases detected by Sumsub in 2023, followed by fintech at 8%.
Pavel Goldman-Kalaydin, Sumsub’s head of AI/ML, emphasized the impact of artificial intelligence on fraud prevention and perpetration. He stated that AI serves as a powerful tool for both anti-fraud solution providers and fraudsters, paving the way for identity theft, scams, and misinformation campaigns on a larger scale.
The report also highlighted the countries most affected by identity fraud, with Bangladesh, Pakistan, and Latvia topping the list. Online media, professional services, and healthcare were identified as the most targeted industries for fraudulent activities.
In addition to deepfakes, other prevalent fraud techniques in 2023 included money muling networks, fake IDs, account takeovers, and forced verification. Forced verification, in particular, saw a 305% increase from 2022 to 2023.
Two emerging trends identified in the report were the forgery of documents from developed economies by fraudsters and the increased targeting of non-regulated entities. Sumsub emphasized the need for enhanced document verification and proactive fraud prevention measures in light of these trends.
Sumsub encouraged collaboration among anti-fraud companies to enhance the accessibility of technologies and exchange knowledge to combat increasingly sophisticated fraud tactics. The Identity Fraud Report is based on aggregated data from millions of users across 28 industries worldwide, with over 2 million fraud attempts analyzed for the study.