Identity fraud doubles in crypto and banking sectors
The crypto and banking sectors both experienced a nearly two-fold increase in identity fraud in 2022, according to a new report from verification platform Sumsub.
The report also finds that over half of all fraud cases happened in just five countries: Bangladesh (22 percent), Pakistan (15.2 percent), Vietnam (8.1 percent), Nigeria (5.4 percent) and the USA (5.1 percent).
Fraud targeting the crypto industry has grown from 0.7 percent of all fraud cases to 1.5 percent. Likewise, banking has seen nearly 100 percent growth in fraud cases, while e-commerce has seen a thirteen-fold increase in the proportion of fraud (from 0.1 percent of all cases in 2021 to 1.3 percent in 2022).
Fraudsters have begun targeting E-sports more frequently too (it accounted for 2.9 percent of all fraud cases) due to the explosive growth of the industry over the past two years and relatively low onboarding barriers.
Older frauds haven't gone away though, using stolen bank cards, chiefly targeting financial services, e-commerce, and gambling industries is still popular. 3.6 percent of all e-commerce revenue in 2022 has been stolen by fraudsters. Payment fraud grew 40 percent from 2021 to 2022, significantly increasing the share of this type of fraud worldwide. Not surprising then that 46 percent of payment merchants now prioritize the prevention of illegal chargebacks.
"As transaction fraud increases and evolves rapidly, the need to safeguard your business is higher than before, and the easiest way to do this is by implementing an advanced transaction monitoring and risk-management solution that cross-checks user KYC data and transaction information to prevent fraud -- just like Sumsub's KYT solution does," says Vyacheslav Zholudev, Sumsub’s co-founder and CTO.
In 2022, the main fraud vectors have been account takeovers (gaining illegitimate access to another person's account), multi-accounting (registering more accounts than permitted), chargeback fraud (raising fake disputes with the bank) and biometric spoofing (using life-like masks, deepfakes, and other advanced methods).
The full report is available from the Subsum site.