A significant proportion of fraud attempts in the financial sector use artificial intelligence

Today about 42.5 PE% of fraud attempts use AI, of which 29% are considered successful.

This is according to a survey conducted by Signicat. Decision-makers at banks, insurers, payment service providers and fintechs are witnessing more AI-based identity fraud than before. In doing so, they expect to continue to grow. However, they fear that they will not be able to adequately address this increase. This is particularly concerning when you consider that artificial intelligence is used in 70% of fraud cases, according to one in nine fraud prevention experts. Additionally, 38 percent of revenue lost to fraud is believed to be due to AI-based attacks.

However, Signicat notes that success rates for AI-based fraud have remained stable over the past three years. However, a turning point can be observed; thanks to artificial intelligence, more sophisticated frauds on a larger scale are becoming possible. Even if success rates remain the same, increased attempts will increase fraud rates overall.

Over the last three years, we have moved away from creating new accounts with fake credentials and started compromising existing accounts. Account takeover attacks are the most common form of fraud, often involving the use of weak and/or reused passwords.

The measures are not implemented

However, financial institutions have not yet implemented or have implemented insufficient measures to prevent this. One possible reason is confusion about how to combat this phenomenon. There is limited knowledge about the exact nature, impact and best prevention technologies. Notably, more than three-quarters of financial services firms have AI-powered identity fraud teams, are upgrading their fraud prevention technologies, and are expecting increased budgets. However, less than a quarter have already started implementing measures.

Tip: Digidentity Founder: “Europe’s Digital Wallet Is the Tool of Choice Against Data Fraud”