Beyond borders: fighting identity fraud through collaboration

Identity fraud is a global issue that’s constantly evolving, impacting businesses across all industries and borders. Despite a 14% reported drop in the number of identity fraud cases in the UK this year reported by Cifas’ Fraudscape 2024 report, the sophistication of these attacks is on the rise. Criminals are leveraging advanced technologies like AI and machine learning to launch widespread, complex attacks, making detection and prevention more challenging than ever.  

The growing threat landscape 

Our recent Global Fraud Report 2024 surveyed over 1,200 fraud professionals across Europe, America, and Asia and found in Europe alone an alarming 79% reported a significant increase in the sophistication of fraud attempts over the past year, with nearly a third highlighting sophisticated fraud as a major threat to their businesses. Deep-fakes, AI-generated videos, pictures and audios clips, and fake identity documents, are growing in maturity, becoming increasingly convincing and hard to identify.  

Criminals are leveraging this emerging technology to their benefit, creating highly convincing false identities, which are then reused across different industries to perpetrate fraud at scale. We’ve seen the impact this can have on organisations but individuals too – deep-fakes of CEOs and senior business leaders have successfully scammed employees into transferring millions to fraudsters, while celebrities, politicians and other public figures have been targeted using this technology, leading to the rapid spread of misinformation across social media.  

The role of generative AI and industrialised fraud 

This is only the beginning. In fact, those we surveyed believed GenAI (27%) and machine learning (27%) will be the biggest trends in identity verification over the next three to five years. Meanwhile, those who believe GenAI will be a major trend are most likely to say they see the increased accuracy of fake ID documents generated by AI (30%), GenAI’s influence on phishing and smishing and the use of GenAI to create deep-fakes (24%) as being the most threatening fraud vectors.  

It’s not just the sophistication of the technology that’s a concern but the sophisticated behind-the-scenes set up of fraud is an alarmingly growing issue. Having undergone its own industrialisation, fraud is a profit-making business machine, and no organisation is safe from being a potential target – unsurprisingly, almost all (96%) of fraud prevention professionals we surveyed are worried about the industrialisation of fraud.  

All this is adding up and taking a toll on the wellbeing of fraud prevention professionals – nearly three in four (73%) European fraud prevention professionals say they have experienced burn out in their job due to the rising levels of fraud and almost everyone (99%) is losing sleep over the risk fraud poses. 

Building trust through onboarding intelligence  

In this backdrop, it’s more important than ever for businesses to build an accurate understanding of their potential customers and whether they can be trusted from the first interaction. However, identifying and stopping fraud at the onboarding stage is one of the top challenges faced by fraud prevention professionals. Our report found only 35% of organisations prioritise spend and resources on fraud detection at the account opening stage. Instead, most focus on monitoring transactions and catching fraudsters during payment or withdrawal stages. This approach leaves a critical window open for fraudsters to exploit, emphasising the need for more robust onboarding processes that pre-emptively stop fraudsters from ever entering a business.  

Collaboration is business critical   

The question is, how can business improve fraud detection at the first point of contact?  

The increase of fraud demands a global, collaborative solution. Four in five (81%) industry professionals think cross-sector identity intelligence sharing and collaboration can be a strategic differentiator in beating fraud. However, our research reveals that while businesses see the benefit of working alongside others to combat fraud, concerns around data privacy and losing their competitive advantage is holding them back.  

Organisations across all industries must overcome their reluctance to share identity intelligence to keep pace with fraudsters. After all, criminals don’t limit attacks to one business, industry or stop at national boundaries either. Trends show fraud can spread rapidly across regions and industries, shape shifting as it does so thanks to advances in technology.  

Not only does intelligence sharing empower businesses to apply friction where necessary, scuppering fraudsters’ plans at the point of onboarding, it allows them to recognise good and great customers and in turn ensure an exceptional user experience. With anonymised data and insights, this can be achieved without sacrificing a competitive advantage and with data privacy at its heart too.  

Companies are increasingly working together to achieve a new commonly held objective: building trust in digital identities – but with more collaboration brings more power in the fight against fraud. Criminals tend to take a scattergun approach to digital scams, targeting multiple businesses with fraudulent identities. By developing a data-sharing network between industries it is possible for all businesses to benefit from real-time fraud intelligence and start to build up a global view of digital identities that will become increasingly valuable in the battle against fraud. Organisations shouldn’t wait for regulation to take this step but understand the value it can bring now and act. 

You can download GBG’s Global Fraud Report 2024 here.