With AI evolving at an unprecedented pace, businesses are increasingly anxious about familiar threats like synthetic identity fraud (SIF) and phishing. The latest report by IDology reveals that nearly half of companies are deeply concerned about AI’s potential to create more believable fraudulent identities, highlighting a critical shift in the fraud landscape.
Generative AI is a game-changer for fraudsters, enabling the swift creation of human-like text, convincing images, and deepfake videos. This technology makes it easier for criminals to craft believable synthetic identities and phishing schemes.
"From phishing scams and account takeovers to the creation of synthetic identities and beyond, the fraud landscape is evolving fast. Tapping into generative AI and technology advances, fraudsters can scale their operations and produce outputs that are remarkably convincing and, in many cases, indistinguishable from content created by humans. As generative AI fuels fraud and customer expectations grow, multi-layered digital identity verification is essential for successfully balancing fraud prevention with friction to drive loyalty and grow revenue," said James Bruni, managing director of IDology.
The report highlights generative AI as a leading concern in fraud prevention for the future, with many respondents citing it as the top trend to monitor. Concerns are particularly pronounced regarding its ability to create accurate synthetic identities, with 45% of companies expressing alarm and 74% anticipating a rise in synthetic identity fraud (SIF).
However, despite these apprehensions, there appears to be a lack of proactive measures among businesses. The number of companies unsure if they have been impacted by SIF or not tracking it at all has grown substantially from 23% in 2021 to 39% in 2024, underscoring the need for enhanced vigilance and strategies in the face of evolving fraud techniques facilitated by AI.
Digital channels are a hotbed for fraud
In addition, there has been an increase in fraud targeting digital platforms, spanning mobile, online, contact center, and in-person channels. More than half (52%) of companies reported a rise in fraud incidents, with online and mobile channels accounting for 65% of this surge.
The majority of businesses (70%) intend to either maintain or boost their investment in mobile technologies over the coming year. This shows the dual imperative of improving user convenience while fortifying security measures to safeguard against escalating threats.
While digital fraud is a primary concern, other channels aren't safe either. As fraudsters exploit vulnerabilities across interconnected online and offline systems, a comprehensive, multi-layered approach to identity verification is crucial.
Other surveys showed ChatGPT-based scams, highlighting that 49% of respondents reported falling victim to counterfeit ChatPTG apps, highlighting significant concerns about phishing and AI-related fraud.
