Fraud hammers online services, drives AI ambivalence

Fraud rates are spiking just like temperatures in many parts of the world.
Global identity verification companies Sumsub, AuthenticID and Okta have published data for the first half of the year (H1 2024), revealing that consumers are slowly embracing digital wallets and mobile driving licenses as they continue to worry over identity theft.
Nigeria, China, Indonesia take lead in global fraud
Nigeria, China and Indonesia are countries with the highest spikes in fraud rates, followed by Turkey and Brazil, according to Sumsub. The UK-based company compared fraud growth rates in H1 2024 to H1 2023, using worldwide client verification data.
Nigeria saw a staggering, 1,091 percent growth in forced identity verification, a type of fraud in which individuals are manipulated by fraudsters into going through verification. Turkey and Vietnam followed, recording spikes in forced identity verification of over 650 percent and 500 percent respectively.
The highest spikes in identity theft were recorded in Indonesia (748 percent), Nigeria (551 percent) and Turkey (390 percent) while deepfake fraud boomed in China (964 percent), Brazil (510 percent) and Pakistan (291 percent).
In terms of industry, the highest fraud rates were recorded in the crypto sector, followed by fintech and online betting or iGaming. Nigeria again took the lead in crypto fraud, seeing a rise of over 1,000 percentage points while fintech fraud was the highest in Brazil, reaching a spike of over 900 percent. Surprisingly, the highest spike in iGaming fraud was recorded in Georgia, almost 500 percent.
US consumers more open to digital IDs
Meanwhile, in the United States, fraudulent transactions in the first half of 2024 were up 73 percent year-on-year, according to Seattle-headquartered AuthenticID. Among this, biometric authentication fraud accounted for 22 percent while ID verification fraud took up 78 percent.
“What we’ve seen thus far in 2024 is that identity crime will continue to hit record highs, targeting both businesses and consumers,” says AuthenticID Founder and President Blair Cohen.
As part of its research, the company polled 500 consumers in North America, showing that 40 percent of individuals have already had their data exposed during a breach this year. Another 68 percent of survey takers said that the threat of identity fraud is impacting how they make purchases, open accounts and do business.
Deepfakes continue to be a part of these concerns. Over 90 percent of respondents could not pick out a real person from a lineup of deepfake headshots, according to AuthenticID’s 2024 Mid-Year Identity Fraud Review.
Consumers also answered questions on digital identity trends such as mobile driver’s licenses (mDLs) and verifiable credentials. Only 13 percent of respondents said they would not adopt an mDL. When it comes to digital identity credentials, however, nearly half (47 percent) of consumers said they were more likely to rely on a physical wallet instead of a digital wallet. Around one-third said they would use both physical and digital while nearly 20 percent said they would prefer digital only.
EU consumers say AI has made the internet less safe
Over 90 percent of European consumers are worried about digital identity theft with nearly three-quarters (71 percent) planning to improve their security. At the same time, however, a similar number of respondents (72 percent) say they are frustrated with the logging-in methods for their accounts.
This security conundrum was revealed by Okta in its 2024 European Customer Identity Survey, querying over 4000 people in the UK, Germany, France and the Netherlands.
Over half of consumers say they have become more aware of their digital footprint during the past year thanks to the rise of cyberattacks and AI. Consumers believe that AI has made the online environment less safe (56 percent) and increased the likelihood of digital identity attacks (59 percent).
Another reason for increased cybersecurity awareness is the rise in hacking: 66 percent of respondents say they know someone personally who has had their details hacked. This awareness could be translated into opportunities for companies – as long as they offer the right solution, Okta’s findings show.
Nearly half (49 percent) of survey takers said they would spend more money on a simple, secure and frictionless login process. And while the rise of AI has brought concern over digital identity attacks, 42 percent of consumers also say they are comfortable with companies relying on AI to make login experiences better.
Article Topics
AuthenticID | biometrics | digital identity | fraud prevention | identity verification | Okta | Sumsub
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