42.5% of fraud attempts are now driven by AI
A new report reveals that AI-driven fraud now accounts for nearly half of all detected fraud attempts in the financial and payments industry.
Published on October 8, 2024
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As cybercriminals increasingly use artificial intelligence to carry out complex fraud attempts, the financial sector is in an exciting battle to protect its customers and assets. A new report from Rotterdam-based Signicat reveals that AI-driven fraud now accounts for 42.5% of all detected fraud attempts in the financial and payments sector. Moreover, it is estimated that 29% of those attempts are successful.
This report sheds light on the rapidly escalating threat posed by AI-enhanced fraud tactics, including the use of deepfakes, synthetic identities and sophisticated phishing campaigns. These advanced techniques enable fraudsters to operate at an unprecedented scale and level of sophistication.
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- The financial sector has seen in fraud attempts over the past three years, driven in part by fraudsters' use of AI.
- Despite the increasing risk, less than a quarter of financial institutions have taken action to implement AI-driven fraud prevention measures, indicating significant vulnerability.
Old solutions not enough
The report shows that three-quarters of respondents said they lack the expertise, resources, and budget to tackle AI-driven identity fraud. This suggests that companies in the financial sector are not prepared for this threat.
Pinar Alpay, Chief Product & Marketing Officer at Signicat: “Companies are implementing defenses against AI-driven identity fraud, but the threat is growing. The acceleration of digitalization we have seen in recent years has also meant that attacks are more sophisticated and more widespread. Mechanisms that worked a few years ago are no longer sufficient, and there is an urgent need for companies to consider a layered approach, combining, for example, electronic identities with risk analysis and taking additional steps if necessary. Only in this way can they strike the right balance between admitting legitimate users without friction and introducing additional security measures when there is a risk. Since account takeover is one of the most common forms of identity fraud, secure and robust digital identity solutions also protect end users and their accounts when logging in or accepting documents.”