Organizations worldwide saw a significant rise in biometric identity fraud last year.
New research by Shufti Pro shows that the overall digital identity and financial fraud rate increased from 20 percent of attempted transactions in 2020 to to 37 percent in 2021.
The Shufti Pro Fraud Report 2021 shows biometrics fraud was a component in roughly one of every five attacks.
More than half of digital fraud attacks in Sudan, Kenya, Cameroon and Ethiopia involved biometric fraud, according to the report. However, biometric fraud rates actually fell significantly as a share of the total in both the US and Europe.
Among all the industries Shufti Pro witnessed the highest fraud rate of in the finance industry. Fines levied against banks for non-compliance with know your customer (KYC), anti-money laundering (AML) and data privacy regulations totalled $937.7 million in the first half of 2021.
Android was much more frequently used to attempt fraud than iOS, but more than three-quarters of fraud attempts (78 percent) came via the web.
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The big surge in fraud, however, was in cryptocurrency, with a 500 percent in 12 months.
“The year 2021 was yet another rollercoaster year for businesses. The identity fraud and financial crime rate significantly increased and 2022 is expecting a higher rate. Just like the finance industry, the cryptocurrency industry is also the target of fraudsters,” noted the report.
Passport fraud
The report says that many digital identity criminals turned to passports, and specifically manipulation of the MRZ code, to spoof identity document verification processes. The company says minute alterations within MRZ code mean it is near impossible to track for systems that lack models trained on real data of identity documents.
Attempts with photoshopped and expired ID documents also increased in 2021. Though Shufti Pro observed better-quality templates for fake ID documents for sale on the dark web than were previously available, the company says this approach is no match for a robust AI document verification system.
The firm also pointed to a rise in deep fakes attacks and an increase in synthetic identity fraud.
The firm urged “all businesses to employ more robust measures to identify manipulated ID documents before it gets too late. Fraudsters have become strategically stronger during the pandemic and considering the level of manipulation we have encountered this year, it is nearly impossible for businesses to combat Frankenstein fraud in the years ahead.”
