“Are you who you say you are?” This seemingly simple question, once reserved for the philosophical musings of great thinkers, has now found its way into the uncharted territories of the digital landscape. It’s no longer the scholars debating identity — it’s the online businesses desperate to discern the truth amidst the ever-looming threat of fraud.
As the digital world evolves at breakneck speed, building trust remotely is increasingly difficult. In this redefined landscape, fraudsters use advanced technologies to hide their real identities. It’s a place where algorithms learn to trick, images change what’s real, and it’s hard to know what’s genuine.
Let’s take a closer look at 5 evolving and emerging fraud types.
1. Phishing
Phishing, a deceptive practice intended to deceive individuals into disclosing sensitive information, has been a persistent issue in the digital landscape. In the past, identifying a fake email or message often relied on detecting grammatical errors or unusual sentence structures. However, this age-old scam has now adopted a new level of sophistication — employing AI-powered chatbots like ChatGPT to craft nearly flawless messages.
This tactic has proven to be quite effective for fraudsters, with phishing scams seeing a rise of nearly 42% in Singapore in 2022. Experts have cautioned that, at this stage, fraudsters are in the process of discovering more effective ways to utilize AI-powered tools. Consequently, there is an emerging possibility of more sophisticated and unforeseen techniques employing chatbots in the upcoming months.
To that extent, according to Jumio’s 2023 Online Identity Study, 57% of surveyed consumers globally and 73% of consumers in Singapore believe that generative AI tools will make online identity theft easier.
2. AI-supported Password Guessing
AI-supported password guessing, also known as AI-assisted password cracking, uses AI techniques to guess or crack passwords. Just like phishing, password guessing leveled up by using machine learning algorithms to accelerate and optimize the process.
Nevertheless, biometric authentication provides an extra level of security that is inherently challenging to replicate or guess. By incorporating biometric authentication into systems and devices, users can verify their identities using their distinct biometric characteristics, reducing reliance on passwords alone. As such, this makes AI-assisted password guessing techniques largely ineffective.
3. Synthetic Identity Fraud
Synthetic identity fraud involves the creation or manipulation of identities using a combination of real and fictitious information. Fraudsters combine stolen or fabricated personal information, such as government identity numbers, with fake names, addresses, and other details to create synthetic identities. These are then used to commit various fraudulent activities, such as opening fictitious bank accounts or conducting fraudulent transactions.
In 2022, over 60% of merchants within Asia Pacific reported a notable rise in synthetic identity fraud cases — marking the highest percentage among all regions worldwide.
However, synthetic identity fraud’s impact extends well beyond the private sector. In a daring case that pushed the boundaries of deception, a duo of fraudsters successfully hacked China’s Taxation System by crafting synthetic identities and counterfeit tax invoices, accumulating an astounding $76.2 million.
This brazen scheme serves as a stark reminder of the urgent need for robust security measures to combat such sophisticated acts of fraud.
4. Deepfakes
Deepfakes are the covert puppeteers of the digital world, manipulating visual content to seamlessly fabricate false realities by using powerful algorithms and AI to replace faces and create remarkably realistic, yet entirely fictional, videos or images.
The Jumio 2023 Online Identity Consumer Study reveals a widespread awareness among consumers regarding its ubiquitous existence and its potential to facilitate identity fraud, with 67% of global consumers and 87% of consumers in Singapore being aware of its impact. The study also found that 52% of global consumers expressed confidence in their ability to identify a deepfake. However, as technology continues to advance, spotting a deepfake may become even more complex.
The emergence of novel face swapping highlights yet another evolution of deepfakes — a subset of face swapping that involves new and innovative methods for cybercriminals to combine existing video or live streams and superimpose another identity over the original feeds in real time. In one reported incident in China, an individual employed AI-driven face-swapping technology to assume the identity of the victim’s friend during a video call, resulting in a fraudulent transfer of $622,000.
As these attacks continue to advance, it becomes imperative for businesses to adopt biometric systems that can effectively detect and
bolster defenses against such threats.
5. Digital Injection Attacks
Digital injection attacks involve the creation of fake biometric samples — such as synthetic fingerprints or facial images — that can circumvent device cameras or infiltrate a data stream, showcasing their ability to compromise digital systems.
Instead of using physical objects such as printed photos, silicone masks, or deepfake videos shown on a screen, digital injection works differently. Attackers employ emulators, hacking tools, or virtual cameras to directly inject imagery into the video stream.
In recent years, the proliferation of deepfake technology and the exploitation of spoof verification processes have contributed to a significant rise in digital injection attacks.
Using AI to Fight AI
In today’s era, seeing is no longer synonymous with believing. Therefore, the implementation of AI-powered end-to-end identity verification solutions becomes even more crucial.
As noted by Frederic Ho, Jumio’s VP of Asia Pacific, “In a landscape where distinguishing between machine-generated and human interactions is increasingly challenging, the importance of biometric-based identity verification and biometric authentication has grown even more significant.”
It’s important for businesses to choose the most innovative and proven technology ready to fight AI with AI. That’s why Jumio’s innovation labs are constantly evolving our AI-driven solutions to stay ahead of fraudsters. We do deep analysis on the anatomy of identity documents and have ground-breaking technology that catches AI-generated fakes that can’t be detected by the human eye. With over 1 billion transactions processed, Jumio is light years ahead in identity proofing across various industries around the world and is the best option for protecting your business and your customers from harm.
Contact us today to learn how we can rapidly implement the most advanced identity proofing technology into your business processes.
