Fake documents and synthetic identities led to higher fraud in financial services in 2022
In 2022, financial services faced increased fraud due to fake documents and synthetic identities, as reported by Regula. Banks reported higher incidents, with a median cost of $479,000, compared to fintech organizations at $120,000. The primary form of identity fraud was through fake or altered physical documents, leading to economic repercussions like business disruption and legal costs.
A recent report exploring the impact of investing in IDV, released by Regula, a global developer of forensic devices and identify verification (IDV) solutions, shows gaps in identity fraud between banking and fintech organisations worldwide. The research conducted between December 2022 and January 2023 found that every fourth bank reported more than 100 identity fraud incidents in 2022 (about 26% of organisations), while 17% were reported in the fintech sector. The most common form of fraud identity was the use of fake or modified physical documents.
The report further indicates the economic and collateral effects of identity fraud. The median cost of identity fraud for banks was nearly half a million dollars (about $479,000) and $120,000 for the fintech sector organizations. The collateral effects were related to business disruption (44%) and legal expenses (36%).
About author
DW Team
The GIP Digital Watch Observatory team, consisting of over 30 digital policy experts from around the world, excels in the fields of research and analysis on digital policy issues. The team is backed by the creative prowess of Creative Lab Diplo and the technical expertise of the Diplo tech team.