More than four in ten attempted fraud attacks on financial institutions in Europe are now using artificial intelligence (AI), with scammers increasingly using deepfakes to impersonate account holders.
A survey by European digital identity company Signicat (in partnership with consulting firm Consult Hyperion) estimates that 42.5% of detected fraud attempts now use AI, and of these 29% are successful.
The study of 1,206 respondents in financial institutions across seven European countries, including Belgium, found that 38% of money that financial institutions lose to fraud is now attributable to attacks using AI.
It highlights that identity fraud attempts have surged by 80% in the past three years, with AI-driven fraud and in particular the use of deepfakes emerging as a "significant threat".
Three years ago, AI was used to create new synthetic identities and falsified documents. Today, AI is being used more frequently for deepfakes, which use technology to recreate a convincing digital likeness of a real person.
Deepfakes now represent 6.5% of total fraud attempts, marking a staggering 2137% increase over the past three years.
However, looking at variances between countries surveyed, the report highlighted that synthetic ID fraud is still the most prevalent kind of identity fraud in Belgium, and Belgium suffers the least from impersonation attempts.
Respondents said that three years ago the most common type of fraud was card payment fraud, with account takeover ranking in third place. Now, account takeover has surpassed card payment fraud as the most common kind of attack.
Investing in AI-fraud protections
The report highlights that around three quarters of organisations cite lack of expertise, time and budget as hindering their ability to detect and combat the problem.
Signicat CEO Asger Hattel said that AI will become "increasingly sophisticated", and fraud prevention decision-makers "need the expertise and resources to prevent it from becoming a major threat".
"Fraud has always been one of our customers' biggest concerns, and AI-driven fraud is now becoming a new threat for them. It now accounts for the same number of successful attempts as fraud in general, and it is more successful when you consider lost revenue," he said, urging businesses to invest in multi-layered technology to combat AI-based fraud.
Signicat, which employs more than 450 people across 17 offices in Europe, offers digital identity solutions for both businesses and end users. The company was acquired by Europe's leading private equity investor, Nordic Capital, in 2019.
