An Exponential Growth in Deepfake Fraud Attempts
In the past three years, attempts at fraud using deepfakes have increased by a staggering 2137%, accounting for 6.5% of the total detected fraud in the financial sector. This is revealed in the report The Battle Against AI-Driven Identity Fraud by Signicat, which warns about the new security challenges arising from advancements in artificial intelligence (AI).
The study, based on surveys of over 1200 fraud experts from financial entities in seven European countries, indicates that identity theft using deepfakes has become one of the main forms of digital fraud, surpassing traditional methods such as phishing and credit card fraud.
Two Types of Deepfake Attacks
The development of deepfake technology has allowed cybercriminals to employ two main types of attacks:
- Presentation Attacks: These include the use of masks, makeup, or projecting a deepfake in real-time to impersonate someone. They are used in scams such as account takeovers or fraudulent loan applications.
- Injection Attacks: These involve introducing pre-recorded videos or altered data into verification systems, affecting onboarding processes, KYC authentication, and identity validation in banks and fintechs.
A Growing Threat in Financial Fraud
Deepfakes have evolved from an emerging technology to a sophisticated fraud method. According to the report, 42.5% of fraud attempts in the financial sector are now driven by AI. In just three years, deepfake fraud has shifted from being a marginal phenomenon to the most common form of digital identity fraud.
Deficiencies in Detection Systems
Despite the increase in AI-driven attacks, only 22% of financial institutions have implemented advanced AI-based fraud prevention tools. This delay leaves many players in the sector vulnerable to tactics that traditional detection systems cannot accurately identify.
Pinar Alpay, Chief Product & Marketing Officer at Signicat, warns: “Three years ago, deepfake attacks accounted for just 0.1% of detected fraud. Today, they make up 1 in 15 cases, highlighting an alarming evolution in the techniques employed by cybercriminals. To protect themselves, companies must combine early risk assessment, robust identity verification, and facial biometrics-based authentication.”
The Future of the Fight Against AI Fraud
To mitigate this growing threat, experts recommend adopting a multilayered security approach, which combines:
- AI-based detection systems to identify suspicious patterns.
- Advanced biometrics to validate user identities.
- Continuous monitoring and real-time analysis tools.
- Education and awareness for customers and employees about the risks of digital fraud.
The Signicat report underscores the urgency for financial institutions to modernize their fraud prevention systems to address a threat that is evolving at an unprecedented pace. With artificial intelligence driving fraud on an industrial scale, the financial industry faces a critical challenge that requires immediate action and innovative strategies to ensure digital security.
Source: Signicat