The Top-5 identity fraud types globally in 2023 are: AI-powered fraud, money muling networks, fake IDs, account takeovers and forced verification.

LONDON, Nov. 28, 2023 /PRNewswire/ -- Sumsub, a full-cycle verification platform, today released its third annual Identity Fraud Report. The report revealed that the UK has experienced a 300% rise in deepfake cases from 2022 to 2023, rising to 780% across all of Europe. The report provides a comprehensive analysis of identity fraud across industries and regions based on millions of verification checks across 28 industries and over 2,000,000 fraud cases between 2022-2023*.

Identity Fraud Main Global Trends and Statistics for 2023

Sumsub's research key findings include:

The top-5 identity fraud types in 2023 are: AI-powered fraud, money muling networks, fake IDs, account takeovers and forced verification.
There's been a significant 10x increase in the number of deepfakes detected globally across all industries from 2022 to 2023, with notable regional differences: 1740% deepfake surge in North America, 1530% in APAC, 450% in MEA and 410% in Latin America.
The country attacked by deepfakes the most is Spain, the most forged document worldwide is UAE passport, whereas Latin America is the region where fraud increased in every country.
ID cards remain the most frequently exploited for identity fraud, accounting for nearly 75% of all fraudulent activities involving identity documents.
Online media is the industry with the highest identity fraud increase.

Artificial Intelligence and Deepfakes: Ambivalent Potential

The challenges posed by deepfake occurrences in Europe have proven significant for Spain, the UK, and Germany, as each of these markets accounts for over 10% of the total cases in the region. The rising frequency of deepfake attacks is associated with the attractiveness of these economically advanced nations to perpetrators, due to their advanced digital infrastructure and the substantial online presence of people in the region.

With AI-driven fraud remaining the most prominent challenge across various industries, crypto is the main target sector (representing 88% of all deepfake cases detected in 2023), followed by fintech (8%).

"The rise of artificial intelligence is reshaping how fraud is perpetrated and prevented. AI serves as a powerful tool both for anti-fraud solution providers and those committing identity fraud. Our internal statistics show an alarming tenfold increase in the number of AI-generated deepfakes across industries from 2022 to 2023. Deepfakes pave the way for identity theft, scams, and misinformation campaigns on an unprecedented scale," comments Pavel Goldman-Kalaydin, Head of AI/ML at Sumsub.

AI will be a key focus of regulations in 2024, and companies should take note with the understanding that AI safety is set to become an integral part of their activities. In addition to the AI-powered fraud prevention tips, the report provides an exclusive overview of AI regulations.

In April 2021, the European Commission proposed the AI Act, the first EU regulatory framework for AI. The legislation, yet to be implemented, aims to promote ethical AI development, as well as enhance user trust and accountability. So far, the UK has not approved any comprehensive legislation prohibiting the generation or dissemination of deepfakes. The recently sanctioned Online Safety bill criminalises the sharing of deepfake material but confines the prohibition solely to pornographic content.

Identity Fraud in Various Industries

The top-5 industries most affected by identity fraud in 2023 are online media, professional services, healthcare, transportation, and video gaming. Online media encompassing news websites, streaming services, social platforms, and digital advertising, saw the biggest 274% rise in identity fraud rate between 2021 and 2023. Large audiences and insufficient regulations create an environment susceptible to fraudulent activities like fake accounts, engagement manipulation, and the spread of misinformation.

In 2023, identity fraud patterns continued to shift towards more complex and sophisticated techniques, fueling more advanced scams and money laundering techniques. Among the most common complex fraud schemes is money muling, where seemingly innocent individuals, known as money mules, are recruited to transfer illegally obtained funds, disguising their origin.

Another disturbing trend is forced verification, when individuals are manipulated into going through KYC for the benefit of fraudsters. This type of scam grew 305% over 2022-2023, raising more concern among experts. Account takeover threat demonstrates growth as well: the number of incidents increased by 155% in 2023. To tackle all these alarming trends, organisations need to implement stricter rules such as mandatory identification.

Overall, in the past three years the fraud landscape has evolved with the development of new technologies, signaling a growing concern for businesses and individuals alike. Based on Sumsub findings, the global rate of identity fraud nearly doubled from 2021 to 2023.

To learn more and download the full Sumsub Identity Fraud Report 2023 for free, please go to https://sumsub.com/fraud-report-2023/.

* Note on Sumsub's research methodology

Sumsub research compares data from 2022 and 2023. In certain cases, 2021 data is also taken into account to observe trends. The study is based on aggregated and anonymised verification statistics on millions of users from 28 industries worldwide, with 2,000,000+ fraud attempts studied. The report analyses trends, patterns, and changes in identity fraud to gain valuable insights. The study combines internal data with input from internal and external experts, providing well-rounded conclusions on the state of identity fraud in 2023.

About Sumsub

Sumsub is a full-cycle verification platform that secures the whole user journey. With Sumsub's customisable KYC, KYB, Transaction Monitoring and Fraud Prevention solutions, you can orchestrate your verification process, welcome more customers worldwide, meet compliance requirements, reduce costs, and protect your business.

Sumsub has over 2,000 clients across the fintech, crypto, transportation, trading, e-commerce and gaming industries including Binance, Mercuryo, Bybit, Huobi, Unlimit, DiDi, Poppy and TransferGo.

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