The Growing Threat of Synthetic Identity Fraud: Impact and Countermeasures
The threat of synthetic identity fraud, especially through deepfakes, is growing due to advances in generative AI, posing challenges for verifying identities. Financial institutions, particularly in the APAC region, including Thailand, are taking stringent measures like biometric authentication to combat these threats. By implementing comprehensive security frameworks and adopting international standards, they aim to protect against fraud and maintain trust in digital transactions.
Deepfakes represent a sophisticated form of synthetic identity fraud, fueled by the combination of stolen data from the dark web and fabricated information.
The advent of generative AI has made creating realistic fake identities increasingly easy and prevalent, posing verification challenges for individuals and financial institutions.
According to a World Economic Forum (WEF) 2023 study, deepfake incidents in the fintech sector surged by 700% from the previous year, with predictions that 90% of online content may be synthetically generated by 2026.
This issue is particularly pressing in the APAC region, including Thailand, where identity fraud is a growing concern.
Financial institutions are vulnerable to deepfake scams resulting in account openings, fraudulent transactions, and money laundering, eroding trust and disrupting services.
Vulnerable groups, primarily the elderly and digitally inexperienced, face significant risks of exploitation.
Thailand is addressing these challenges by implementing robust anti-fraud measures.
In March 2023, Thailand’s central bank mandated biometric authentication for new account openings and significant digital transfers.
By September 2023, guidelines for safeguarding biometric data in banking were established alongside the Personal Data Protection Act, which regulates data handling with potential fines and imprisonment for violations.
Concurrently, global digital ID solutions are rising, projected to grow from US$34.5 billion in 2024 to US$83.2 billion by 2028.
Thailand's National Digital ID Platform sets a framework for secure digital identities, facilitating reduced fraud and enhancing customer satisfaction.
To improve security, financial institutions should incorporate advanced biometric verification features, ensure effective model risk management, and adhere to international standards such as ISO and NIST.
They are encouraged to maintain rigorous third-party risk management with certifications like ISO 27001 and SOC 2 Type 2, encrypt biometric data, and adopt a zero-trust security model.
These measures help protect against synthetic identity fraud and maintain robust security postures.
The advent of generative AI has made creating realistic fake identities increasingly easy and prevalent, posing verification challenges for individuals and financial institutions.
According to a World Economic Forum (WEF) 2023 study, deepfake incidents in the fintech sector surged by 700% from the previous year, with predictions that 90% of online content may be synthetically generated by 2026.
This issue is particularly pressing in the APAC region, including Thailand, where identity fraud is a growing concern.
Financial institutions are vulnerable to deepfake scams resulting in account openings, fraudulent transactions, and money laundering, eroding trust and disrupting services.
Vulnerable groups, primarily the elderly and digitally inexperienced, face significant risks of exploitation.
Thailand is addressing these challenges by implementing robust anti-fraud measures.
In March 2023, Thailand’s central bank mandated biometric authentication for new account openings and significant digital transfers.
By September 2023, guidelines for safeguarding biometric data in banking were established alongside the Personal Data Protection Act, which regulates data handling with potential fines and imprisonment for violations.
Concurrently, global digital ID solutions are rising, projected to grow from US$34.5 billion in 2024 to US$83.2 billion by 2028.
Thailand's National Digital ID Platform sets a framework for secure digital identities, facilitating reduced fraud and enhancing customer satisfaction.
To improve security, financial institutions should incorporate advanced biometric verification features, ensure effective model risk management, and adhere to international standards such as ISO and NIST.
They are encouraged to maintain rigorous third-party risk management with certifications like ISO 27001 and SOC 2 Type 2, encrypt biometric data, and adopt a zero-trust security model.
These measures help protect against synthetic identity fraud and maintain robust security postures.
