By: 9 October 2024
42.5% of fraud attempts now AI-driven, reports Signicat

With AI-driven fraud on the rise, the financial industry needs to act now to build better defences and stay ahead of cybercriminals.  

Cybercriminals are now using artificial intelligence (AI) to carry out complex fraud schemes, and the financial sector is struggling to keep up. Signicat’s latest report, Battle Against AI-Driven Identity Fraud, reveals that 42.5% of all fraud attempts in the financial and payments industry now involve AI.  

Even more concerning, nearly 30% of these attempts are successful. 

The report shows how AI is helping criminals use advanced tactics like deepfakes, fake identities, and advanced phishing scams. These methods allow them to operate on a larger scale and with more precision, making it harder for banks and financial institutions to stop them. 

Key findings on AI-driven fraud 

The report outlines several critical trends in AI-driven fraud. 

Firstly, that AI-driven fraud is on the rise. Nearly half (42.5%) of detected fraud attempts involve AI, suggesting they are becoming more common. 

Secondly, there has been a leap in fraud attempts. Over the past three years, fraud attempts in the financial sector alone have surged by 80%, partly due to AI. 

Many companies are not ready to handle AI-driven fraud. The report found that three-quarters of companies lack the knowledge, resources, and money needed to fight this new threat. Another report by Kasada shows that 87% of financial executives are worried about AI-driven fraud, which shows how serious the problem is. 

Pinar Alpay, Chief Product & Marketing Officer at Signicat, stressed the importance of stronger security measures: 

“Companies are of course putting in place defence mechanisms against AI-driven identity fraud, but the threat is growing. The acceleration of digitalisation we are seeing in recent years has also made attacks more sophisticated and executed at scale.  

“Mechanisms that worked a few years ago are no longer sufficient and it is urgent that companies consider a multi-layered approach, combining for example electronic identities with risk analysis and if required, step-ups.  

“Only in this way can they strike the right balance between letting legitimate users through with less friction and introducing additional security measures when there is a risk,” stated Pinar Alpay, chief product and marketing officer at Signicat. 

Image: © cyano66 via Canva
Josie Geistfeld
Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk