Fraud attempts with deepfakes surge over last three years

Financial institutions are facing a significant escalation in fraud attempts, driven by the growing sophistication of deepfake technology.

According to a report by Signicat, published on 21 February 2025, deepfake fraud incidents surged by 2,137% over the past three years.

Called The Battle Against AI-Driven Identity Fraud, the report also revealed that deepfakes have become one of the top three methods of identity fraud in the financial and payments sector.

Deepfakes use artificial intelligence (AI) to create hyper-realistic digital forgeries, enabling two main types of fraud attacks –presentation attacks and injection attacks.

Presentation attacks typically involve fraudsters using masks or screens displaying deepfakes to impersonate legitimate individuals, often for fraudulent loan applications or account takeovers.

Injection attacks, on the other hand, involve introducing malware or corrupted input during onboarding or Know-Your-Customer (KYC) processes, posing severe risks to the integrity of financial institutions’ security systems.

Pinar Alpay, chief product and marketing officer at Signicat, said: “Three years ago, deepfake attacks were only 0.1% of all fraud attempts we detected, but today, they represent around 6.5%, or 1 in 15 cases.

”This represents an increase of 2,137% in the last three years, which is alarming. Fraudsters are using AI-based techniques that traditional systems can no longer fully detect.”

Response lagging

Signicat surveyed over 1,200 fraud decision-makers across seven European countries, including the UK.

Despite the rise in deepfake fraud, the firm also found that financial institutions are lagging in their response to these evolving threats.

For example, only 22% of financial institutions have implemented AI-based fraud prevention tools. This leaves a significant gap in the sector’s ability to detect and mitigate the sophisticated methods used by cyber criminals.

Signicat has urged organisations to consider combining AI, biometrics and identity verification in a coordinated strategy that strengthens fraud detection capabilities.

“The steep rise in deepfake fraud is part of a broader trend of AI-driven identity fraud and organisations must act swiftly to upgrade their fraud detection systems,” Alpay said.

“A multiple detection setup is crucial. By combining early risk assessment, robust identity verification and authentication methods based on facial biometrics, and ongoing monitoring, companies can better protect both their operations and their customers.”