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European Fintechs Experienced Double the Amount of Identity Fraud in 2021 Compared to 2020

Veriff, a global identity verification provider, has released its 2021 Identity Fraud Report. The findings from Veriff’s expert fraud team shine a light on the increase in fraud over the past year, as well as the different types of fraud that Veriff monitors and prevents across fintech, mobility, and crypto industries. Overall, there has been an astonishing 61 per cent increase in fraudulent activity in 2021 compared to 2020.

Understanding the global state of fraud across different industries is critical for Veriff to examine as the company aims to create a safer space online and build trust between businesses and consumers. The world shifted operations online due to covid-19 and identity verification plays a major role in protecting all digital transactions. Key takeaways from Veriff‘s 2021 Identity Fraud Report include:

  • Identity fraud rates have doubled YOY: Identity fraud makes up close to two-thirds of all fraud incidents globally and has doubled compared to 2020, making it the most prevalent fraud type in the cryptocurrency and fintech industries. Identity fraud is more common in the US than in Europe, making up 60 per cent and 52 per cent of all fraud incidents respectively.
  • Fintech is at risk: Despite heavy investment in security and prevention tools, the fintech industry saw a 50 per cent increase in fraudulent activity compared to the year before. Identity fraud was most common within fintech, representing 56 per cent of fraud attacks with fraudsters using ID cards the most (33.91 per cent) for their illicit verifications, followed by passports (29.19 per cent).
  • Crypto goes mainstream: As the crypto industry continues to grow, unfortunately so do the risks. Similar to our findings in 2020, crypto remains the most fraudulent industry compared to fintech and mobility, with a net fraud rate of 7.44 per cent. Identity fraud (44 per cent) is the most common type of fraud and Veriff saw the largest growth in ID document fraud, which doubled compared to 2020.
  • Global fraud increases in the US and EuropeThe global mean fraud rate was 9 per cent. On average, in 2021 the US (8 per cent) experienced more fraud than Europe (6 per cent). In 2021, Europe has seen identity fraud double compared to the year before.

“Through the urgency to digitise over the past 18 months, businesses and consumers alike have increased online transactions and activity. However, this increase in activity shouldn’t equate to more risk and identity fraud. Yet, our report findings clearly show that financially motivated cybercriminals are not slowing down,” said Janer Gorohhov, CPO and co-founder of Veriff. “Concepts like AI-based video editing and augmented video processing are not just buzzwords anymore. Users online can access plug-and-play products that enable them to use the power of deep learning and advanced AI to mask, anonymise, and alter images and videos. Therefore, there’s a growing need for solutions like Veriff’s technology that can catch deepfakes.”

Author

  • Francis is a journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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