From banking to real estate, healthcare, ride sharing, and more, it’s increasingly clear that no sector is immune to identity fraud. Indeed, the 2024 report End-user expectations of digital identity, from Onfido, an Entrust company, reveals that 12% of users (roughly 1 in 10) of digital services fell victim to fraud last year, with higher rates reported by American (15%), French (14%), and Canadian (13%) consumers.

From identity theft and account takeover to identity cloning and new account creation, arguably the most pernicious form of fraud is synthetic identity fraud. As we mentioned in this previous blog post, AI-generated deepfakes are increasingly realistic and difficult to identify. A recent U.S. study revealed that 72% of American social media users find it challenging to spot AI-generated content such as fake news and scams; and only 27% feel confident they would be able to identify if a call from a close friend or family member was real or AI-generated. Plus, AI has simultaneously increased the scale of personalized attacks and reduced the skill level required to perform them.

Fraud threats span generations, industries, and geos

A somewhat surprising identity fraud statistic in the study from Onfido, an Entrust company, is that younger generations were more often the victim of identity fraud than people aged 45+. However, when you consider that younger people spend more time online openly sharing personal information and typically have less experience recognizing the signs of fraud, it all makes sense. Plus, they tend to be more vested in products like crypto that are favored fraud targets.

While overall industry fraud continues to tick up, the relative ranking of average fraud by industry shifts from year to year. According to the Entrust Cybersecurity Institute’s Identity Fraud Report, in 2023, average industry fraud rates ranged from a high of 7.6% for gambling to a low of 0.8% for telecom. Among the middle industries were financial services (3.9%) and healthcare (3.2%.)

Industries like financial services are well aware of the risk that fraud poses, so they often have stringent levels of security in place. But they also have high growth targets, making seamless secure customer conversion at onboarding paramount. The good news is that end-users see fraud prevention as the biggest benefit to identity verification, followed closely by speed.

From a geolocation perspective, fraudsters are most active in Asia, with an average fraud rate of 9%. North America is at 5.2%, Europe at 3.1%. In 2023, fraudsters targeted national ID cards more than any other document type, accounting for 46.8% of all document fraud, followed by passports at 23.7% and driver’s licenses at 17.5%. The Canadian province of Ontario driver’s license has the dubious honor of being the most attacked document in North America last year at 10.4%.

Leveraging AI-powered identity solutions for fraud prevention

The good news on the fraud front is that all verticals can learn from hard-hit early targets – such as banking  – on how to leverage AI-powered identity centric solutions for:

  • Secure document and data verification
  • Enhanced user authentication and biometric verification
  • Digital onboarding and credential issuance
  • Data protection and encryption
  • Device and behavioral analytics
  • Improved user experience

After all, J.P. Morgan not only successfully fends off 45 billion cyberattacks a day but also counts many of the world’s most prominent corporations, governments, wealthy individuals, and institutional investors among its client base.