The growth of fraud in the fintech world: statistics and innovative solutions

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The fintech world is experiencing unprecedented growth, with digital transactions expanding rapidly. However, this development has led to a parallel increase in fraud. In 2024, the need to address these threats with innovative approaches became crucial for all fintech companies.

The statistics

A recent PwC Global Economic Crime and Fraud Survey 2024 report showed that 47% of companies globally experienced fraud in the previous 24 months, with an average financial loss of more than 42 million dollars for each company involved. Fintech companies, in particular, have been among the most affected, due to their rapid digitalization and accelerated onboarding processes.

Juniper Research's 2024 Cybercrime Report predicts that digital fraud losses will reach 48 billion dollars by the end of the year, with a significant increase in synthetic identity fraud and account appropriation (ATO) attacks.

Synthetic identity fraud: a growing threat

Synthetic identity fraud has become one of the favorite techniques of cybercriminals. Using stolen or fictitious personal data, fraudsters create completely new identities that pass KYC checks. According to a McKinsey study, synthetic identity fraud now accounts for 10-15% of all unrepaid loan losses.

Some fintech companies, with their digital-first models, are particularly vulnerable, since they rely on automated identity verification processes that can be easily fooled by well-constructed artificial identities.

Account Takeover (ATO): a concrete problem

Account appropriation (ATO) attacks continue to pose a serious threat. According to Javelin Strategy & Research, in 2023, global losses due to ATO attacks exceeded 11 billion dollars, an increase of 90% compared to the previous year. ATOs have become increasingly sophisticated, with the use of techniques such as credential stuffing, which exploits large volumes of stolen credentials-

This type of attack not only causes direct financial losses, but it seriously damages customer confidence in fintech platforms, prompting them to seek safer alternatives.

Social Engineering and APP Fraud

Authorized push payment (APP) fraud is on the rise. According to research by UK Finance, in 2023, more than 1 billion pounds were lost in the UK due to APP fraud, with fraudsters circumventing victims in order to have money transferred to their accounts. The lack of clarity on who should take responsibility for these losses is making the issue even more difficult for fintech companies to manage.

Conclusions

Fraud in the fintech world is growing, but with the right measures and technological investments, companies can protect themselves. To counter these threats INEO offers advanced anti-fraud solutions, particularly effective for challenges related to digital identity and document verification. Thanks to cutting-edge tools, such as real-time control and in-depth analysis of documents using digital forensic techniques and OSINT, INEO helps companies to significantly reduce fraud risks.

The integration of these solutions not only facilitates customer onboarding, but also improves compliance with regulations such as KYC, KYB and AML, making identity management more secure. With a multilevel approach, INEO combines automated controls and specialist supervision to ensure accurate analysis and prevent fraud at every stage of the process.

In a world where secure identity management is crucial to combat concrete threats, INEO's solutions represent a reliable ally for companies that want to protect their customers and optimize their operational processes

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