APAC Deepfake Incidents Surge 1530% in the Past Year Amidst Evolving Global Fraud Landscape

Sumsub's annual Identity Fraud Report sheds light on the evolving nature of digital fraud and potential trends for businesses and regulations

SINGAPORE, Nov. 28, 2023 /PRNewswire/ -- Sumsub, a full-cycle verification platform, today released its third annualIdentity Fraud Report. The report revealed that the APAC region has experienced a 1530% surge in deepfake cases from 2022 to 2023, marking it as the second-highest region in this concerning trend. In addition to this insight, the report highlights a growing trend in sophisticated scams and money laundering cases globally, underscoring the necessity to address and combat evolving fraud patterns.

Identity Fraud Main Trends and Statistics for 2023

Other key findings from the report include:

• Indonesia, Hong Kong, and Cambodiahave witnessed a more than two-fold increase in identity fraud percentages from 2021 to 2023.
• Bangladesh and Pakistanhave the highest fraud rates in both APAC and the world in 2023, with rates of5.44%and4.59%respectively.
• Singaporestands out for successfully reducing its fraud rate in 2023, maintaining a low level of0.89%.
• Japan, Australia and Thailandhave maintained their fraud rates atunder 2%over 2021-2023.
• There's been a significant10x increasein the number of deepfakes detected globally across all industries from 2022 to 2023, with notable regional differences:1740%deepfake surge in North America,1530%in APAC,780%in Europe (including UK),450%in MEA and410%in Latin America.
• The top-5 identity fraud types in 2023are: AI-powered fraud, money muling^[1]networks, fake IDs, account takeovers and forced verification^[2].
• Online mediais the industry with the highest identity fraud increase (274%) between 2021 and 2023.

Artificial Intelligence and Deepfakes:A Growing Threat

With AI-driven fraud remaining the most prominent challenge across various industries,cryptois the main target sector (representing88%of all deepfake cases detected in 2023), followed by fintech (8%). In the APAC region, Vietnam and Japan rank the highest for the prevalence of deepfake fraud. Japan, in particular, had notable widespread use of deepfakes in the entertainment sector, while Vietnam, with its rapidly growing digital economy and online-native population, stands as an appealing target for fraudsters.

To combat the prevalence of AI-powered fraud, countries are proactively introducing measures and regulations aimed at safeguarding businesses and individuals from the harmful impacts of AI such as the effects of deepfakes. For instance, the Hong Kong Monetary Authority (HKMA)published a circularwith enhanced measures to defend e-banking from fraudsters in October 2023 which includes enhanced monitoring for suspicious transactions and additional customer authentication.

"The rise of AI presents a paradox. While it can be wielded for malicious purposes, it also stands as an ally for anti-fraud solution providers. The key to ensuring that AI contributes positively to society lies in the establishment of robust regulations and policy guidelines. These measures are crucial for creating an environment conducive to responsible technology use. At Sumsub, we advocate for close collaboration between businesses and regulators, to foster a future of innovation that aligns with compliance standards,"commentsPenny Chai, Vice President of Business Development, APAC, at Sumsub.

Verification and Identity Fraud Prevention in 2024: Expert Insights

The report also echoed that AI will be a key focus for regulators in 2024. For instance, China is known to have pioneered deepfake regulation, with the "Regulations on the Administration of Deep Synthesis of Internet Information Services" approved by the Chinese Cyberspace Administration Authority (CAC) in December 2022 and having come into force in August 2023.

Other trends forecasted in the report include the necessity for more robust regulatory responses, an increased emphasis on non-document verification to offer diverse options for confirming identities, online media implementing stricter rules regarding identification, the mandatory need for local authorities to enhance data security and personal information, and the rise of network analysis as a tool to uncover fraud.

To learn more and download the full Sumsub Identity Fraud Report 2023 for free, please go tohttps://sumsub.com/fraud-report-2023/.

* Note on Sumsub's research methodology

Sumsub research compares data from 2022 and 2023. In certain cases, 2021 data is also taken into account to observe trends. The study is based on aggregated and anonymized verification statistics on millions of users from 28 industries worldwide, with 2,000,000+ fraud attempts studied. The report analyzes trends, patterns, and changes in identity fraud to gain valuable insights. The study combines internal data with input from internal and external experts, providing well-rounded conclusions on the state of identity fraud in 2023.

AboutSumsub

Sumsub is a full-cycle verification platform that secures the whole user journey. With Sumsub's customizable KYC, KYB, Transaction Monitoring and Fraud Prevention solutions, you can orchestrate your verification process, welcome more customers worldwide, meet compliance requirements, reduce costs, and protect your business.

Sumsub has over 2,000 clients across the fintech, crypto, transportation, trading, e-commerce and gaming industries including Binance, Mercuryo, Bybit, Huobi, Unlimit, DiDi, Poppy and TransferGo.

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¹A case where seemingly innocent individuals, known as money mules, are recruited to transfer illegally obtained funds, disguising their origin.

²An instance where individuals are manipulated into going through Know Your Customer (KYC) procedures, for the benefit of fraudsters to for the benefit of fraudsters.

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SOURCE Sumsub