SmileID forecasts more synthetic ID fraud in Africa in 2024

The Chief Executive Officer of SmileID, Mark Straub, has issued a warning about the increasing threat of synthetic identity fraud in Africa in 2024. According to the 2024 Digital Identity Fraud in Africa report released by SmileID, the continent is facing a rising wave of sophisticated fraud attacks that combine hyperrealistic deepfakes with stolen ID credentials obtained via the web or data leaks. Straub highlighted the need for more comprehensive strategies to combat the evolving tactics of fraudsters. The report indicates a concerning trend of growing fraud across Africa, with fraudsters continuously adapting and changing their tactics. Companies are urged to adopt a comprehensive approach that includes modern technologies like AI to enhance their fraud prevention measures. AI has become a game-changer in the fight against identity fraud, as traditional KYC methods are no longer sufficient to combat sophisticated fraud schemes. Companies that incorporate biometric solutions like selfie checks and liveness checks have proven to be four times more effective in preventing fraud compared to those relying solely on textual checks. However, even these advanced measures are now vulnerable to AI-powered fraud tools, which can mimic individuals and create realistic fake identities. The prevalence of synthetic identity fraud in Africa, although still relatively simplistic and petty, poses a significant challenge for companies. The majority of fraud cases involve fake or tampered ID documents, mismatched faces, or expired ID numbers. To address these evolving threats, companies must invest in sophisticated AI and machine learning models to stay ahead of fraudsters. Each region in Africa presents unique challenges and requirements in combating identity fraud. While some countries like Nigeria have adopted modern digital tools for onboarding processes, others rely more on physical documents, necessitating the use of computer vision tools to detect fakes. South Africa and Kenya are highlighted as targets for identity fraud, particularly due to transitions between old and new ID systems that create vulnerabilities. SmileID's comprehensive report draws on data from 100 million verifications conducted over the past seven years, offering insights into various fraud methodologies and their prevalence across Africa. One alarming trend identified in the report is the high incidence of payment fraud, accounting for 42% of attempted transactions last year. As Africa strives for regional integration and cross-border payments under initiatives like the AFCSA, combating payment fraud becomes crucial. The report underscores the importance of industry collaboration to tackle fraud effectively, emphasizing the sharing of insights and data to enhance fraud prevention measures. SmileID is working closely with banks, fintechs, and other industry players to leverage its expertise and technology in combating fraud and safeguarding financial transactions in 2024.