Today, about 42.5 per cent of fraud attempts use artificial intelligence, 29 per cent of which are considered successful.
This is the finding of Signicat in a survey. Decision makers at banks, insurers, payment providers and fintechs are all seeing more AI-driven identity fraud than before. In doing so, they expect a further increase. However, they fear that they cannot properly address the rise. It is extra worrisome when you consider that according to one in nine fraud prevention experts, AI is used in 70 per cent of fraud cases. In addition, 38 per cent of lost revenue due to fraud is said to be due to AI-driven attacks.
Signicat does note, however, that success rates of AI-driven fraud have remained steady over the past three years. Yet a turning point is observable; more sophisticated fraud on a larger scale is becoming possible because of AI. Even if success rates remain the same, increased attempts increase fraud overall.
The past three years have seen a shift from creating new accounts with forged credentials to compromising existing accounts. Attacks involving account takeovers are the most popular form of fraud, often involving the use of weak and/or reused passwords.
Measures fail to materialize
However, financial institutions have not yet implemented or have implemented insufficient measures to prevent it. One possible cause is confusion about how to combat it. There is limited understanding of the exact nature, impact, and best prevention technologies. Notably, more than three-quarters of financial services firms have teams dedicated to AI-driven identity fraud, are upgrading their fraud prevention technology and expect increased budgets. However, less than a quarter have already started implementing measures.
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