Physical Fakes Were Used More By Fraudsters In The Fintech Industry In 2020 And 2021, Claims Security Frim Sumsub

A recent study by the tech firm that addresses issues of money laundering and online fraud, Sumsub, has found that more than 65% of all identity fraud in the world in 2020 and 2021 happened while people undergo ID checks.

Other activities that are prone to fraud are biometric checks (7% of the total frauds in 2020 and 2021 cent of fraud), proof of address checks (5%), and selfie checks (1%).

The study arrived at these conclusions after examining more than 6,000 different types of document types gathered from more than 220 countries and territories of the world. The aim of the study was to identify and take measures against the prevailing identity fraud in various industries, including banking, crypto, trading, and gambling.

The study further showed that more than 60% of the fraudsters make use of physical fakes to defeat security and verification systems, while the prevalence of the use of digital forgeries for the same was lower than 15% of the total incidents. Physical documents were forged from scratch by fraudsters in more than one-third of the total cases examined while forgery by tampering with a valid document was found to have been done in 22% of the forgery incidents.

“Fraud rates aren’t going to decline. This is an eternal game of cat-and-mouse: criminals come up with new fraud techniques, and we learn to catch them. The biggest danger is deepfakes. At present, it’s difficult for an ordinary person to make a high-quality deepfake—but soon, I’m afraid, technologies will reach the point where everyone can make a realistic deepfake on their phone in two seconds. We must not lose our vigilance and work ahead of fraudsters,” said Vyacheslav Zholudev, Sumsub’s co-founder and Chief Technical Officer.

The study also closely examined and underscored the prevalence of fraud and forgery in the industries of banking, crypto, trading, and gambling.

There was a high percentage of fraud being committed during the winter holidays in the banking industry.

And there was a significant surge in the number of fraud-related incidents in the crypto sector in November 2020. Such incidents gradually tapered off. There was a double peak in late 2020/early 2021 in the number of frauds in the crypto trading sector.

The report noted that the fraud rate remained stable overall in the gambling industry.

The report also highlighted the fact that the skill level of the fraudsters was also increasing. According to data from Sumsub, advanced forgery techniques were used in 35% of all fraud attempts during the period and this trend is expected to grow in the coming years, the company said. A number of recommendations to companies and the targeted industries were also made by Sumsub to help in preventing fraud in the report. The security firm believes that the screening for complex fraud schemes at different onboarding stages was the most effective method for companies to bring down and potentially eliminate incidents of fraud. The report also advised companies in various sectors to consider specific red flags, including suspicious email domains and IP addresses, to prevent fraud.

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