Cybersecurity Insights

The Use of Physical Fakes Is Prevalent Across the Fintech Industry; Sumsub Data Finds

Sumsub, the tech company that fights money laundering and online fraud, has released the results of its identity fraud study while making predictions for the upcoming year.

Analysing 6,000 document types from 220+ countries and territories, the research was conducted between 2020 and 2021 and addressed the prevalence of identity fraud within various industries, including banking, crypto, trading, and gambling.

The study revealed that over 65 per cent of identity fraud occurs during ID checks. Other fraud-prone verification stages include biometric checks (seven per cent of fraud), proof of address checks (five per cent), and selfie checks (one per cent).

Over 60 per cent of fraudsters use physical fakes to trick the verification system, while digital forgeries are used by less than 15 per cent. In a third of cases, fraudsters forge physical documents from scratch; whereas in 22 per cent of cases, they tamper with a valid document.

Vyacheslav Zholudev, Sumsub’s co-founder and Chief Technical Officer.
Vyacheslav Zholudev

“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,” says Vyacheslav Zholudev, Sumsub’s co-founder and Chief Technical Officer.

The report also highlights the prevalence of fraud in the banking, crypto, trading, and gambling sectors. In the banking sector, more fraud was committed during the winter holidays. The crypto fraud rate spiked in November 2020 and then gradually decreased, while the trading sector saw a double peak in late 2020/early 2021. In the gambling sector, the fraud rate remained stable overall.

It also turns out that fraudsters are becoming more skilled. Sumsub’s data suggests that 35 per cent of all fraud attempts are initiated by fraudsters using advanced forgery techniques, and the company expects this figure to rise in the future.

Sumsub concludes with several recommendations to help companies avoid identity fraud. Accordingly, the most effective way for businesses to stay safe is to screen for complex fraud schemes at different onboarding stages. It’s also essential to consider specific red flags, including suspicious email domains and IP addresses.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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