Fintech
Organizations remain unprepared to combat AI-related fraud, Signicat reveals
European fraud prevention decision makers are well aware of the growth and danger of AI-driven financial and identity fraud, but are unprepared to combat it. Meaningthe European provider of digital identity and fraud prevention solutions, revealed in a new report.
‘The battle against identity fraud driven by artificial intelligenceSignicat’s study delves into how organizations across Europe are combating the growing threat of AI-powered identity fraud. It asked banks, insurers, payment providers and fintechs about their experience, how artificial intelligence is changing fraud and whether they are ready to fight it.
Over a thousand fraud decision-makers in Belgium, Germany, the Netherlands, Norway, Spain, Sweden and the United Kingdom took part in the research.
Signicat found that about a third of AI-driven fraud Fraud attempts are successful: According to respondents’ estimates, 42.5% of detected fraud attempts use artificial intelligence, of which 29% are considered successful.
One in nine said the use of AI in fraud attempts is estimated to be as high as 70% for their organization, while 38% of revenue loss due to fraud is estimated to be due to AI-driven attacks artificial intelligence.
Organizations are unsure how to combat AI-related fraud
Most fraud decision makers agree that AI is a major driver of identity fraud (73%), that AI will enable almost all identity fraud in the future (74% ) and that artificial intelligence will mean more people will fall victim to fraud. than ever (74%).
However, many organizations remain unprepared for the growing threat of AI-based fraud Asger HattelCEO of Meaning: “Fraud has always been a major concern for our customers, and AI-based fraud is now becoming a new threat to them. It now represents the same amount of successful attempts as general fraud, and is more successful when considering the loss of revenue.
“From now on, artificial intelligence will become more and more sophisticated. While our research shows that fraud prevention decision makers understand the threat, they need the skills and resources to prevent it from becoming a major threat. A key part of this will be the use of AI-based fraud prevention tools, to combat these threats with the best technology offerings.”
Taking action against AI
Artificial intelligence is enabling more sophisticated fraud, on a scale never seen before. Even if fraud success rates remain the same, the sheer volume of attempts means fraud levels are set to explode, Signicat explained.
The digital identity company revealed that account takeover attacks are the most popular type of fraud, often exploiting weak or reused passwords. Deepfakes, often used to impersonate an account holder rather than create a new or synthetic identity, are much more popular, accounting for 1 in 15 fraud attempts.
Despite the fact that organizations generally understand the extent of the damage that AI-based fraud can do, most do not know which techniques and technologies will help them the most. Signicat further explained that many companies have plans in place with implementation times mostly in the next twelve months, demonstrating a slowness to adapt to evolving types of fraud.
David Birch, director of Consult Hyperion, commented: “It is essential that financial companies have a robust strategy against AI-based identity fraud. Identity is the first line of defense. Identity systems must be able to withstand and adapt to ever-evolving fraud tactics to protect legitimate customers and ensure service reputation.”
A layered approach could be key to staying ahead of AI-based fraud, Signicat says. The company itself offers data enrichment and verification solutions, as well as continuous identity monitoring to ensure that no fraud is committed after the customer registration process.