In 2025, online fraud continued to proliferate, driven by identity fraud, advances in artificial intelligence (AI), and increasingly sophisticated attacks targeting finance and e-commerce, according to a new report by identity verification provider Veriff.

The report, which draws on an analysis of Veriff’s global customer data throughout 2025, gives an overview of the state of online fraud across different industries, regions, fraud types and use cases, and highlights emerging trends and evolving attack vectors.

Top Identity Fraud Trends in 2026

Fraud remains a persistent threat

In 2025, online fraud remained at a consistent level, with 4.18% of all verification attempts encountered by Veriff being fraudulent. This means that one in every 25 attempts involved someone impersonating another individual, confirming that fraud continues to pose a persistent global threat to organizations. The figure follows two consecutive years of 20% year-on-year (YoY) increases.

These findings are broadly consistent across online identity specialists. Sumsub, an identity verification and anti-money laundering (AML) provider, reported an overall fraud rate of 2.2% in 2025. While this represents a decline from the 2024 peak of 2.6% during the emergence of new, sophisticated and accessible fraud tools, it remains above the 2% rate of 2023.

AI intensifies the threat

In 2025, AI-driven fraud continued to accelerate. Compared to the prior year, Veriff observed that digitally-presented media was 300% more likely to be either entirely AI-generated or otherwise altered in 2025, confirming other industry findings about the growth of AI and deepfake-powered fraud.

Sumsub also witnessed a surge in AI-driven fraud. In 2025, AI-assisted document forgery accounted for 2% of all fake documents detected, up from virtually zero the year before. Although AI-enabled fraud still represents a small share of overall fraud, this rate of growth is alarming, the company said.

Sumsub also reported a rise of AI fraud agents. These agents combine generative AI, automation frameworks, and reinforcement learning to can create synthetic identities, interact with verification systems in real time and adjust behavior based on outcomes. This makes them very sophisticated and much harder to detect.

E-commerce and finance draws most attacks

The Veriff report also looks at sectoral trends. It highlights that in 2025, financial services remained one of the most heavily targeted sectors, reflecting high potential financial returns for fraudsters. Veriff reported a net fraud rate of over 5.5% in financial services, which is around 30% higher than the global average.

Within the sector, cryptocurrency and lending platforms led the way with the most identity fraud, while trading and investment platforms saw the most authorized fraud. Traditional banks scored high across both fraud types.

Year-on-year (YoY), total attempted fraud increased by more than 38% in the crypto sector and by 9.6% in payments, while attempted document fraud in crypto rose by over 21%.

While fraud attempts were significant in the financial services sector, e-commerce was actually the worst hit industry in 2025, recording a net fraud rate of 19.2%. The figure is five times the global average, underscoring the disproportionate exposure of the e-commerce sector and the sector’s heightened vulnerability to sophisticated fraud schemes.

Opportunistic targeting across sectors

But fraudsters are also targeting sectors where financial incentives are less obvious. Increasingly, they engage end users across multiple digital touchpoints, like video gaming sites, online communities, or dating platforms, to build a rapport or harvest personal data. This data or rapport may then be used to access their target’s financial accounts or coerce them into performing a transaction. Romance scams are a relevant example of this tactic.

Another example of the use of multiple digital touchpoints to commit fraud occurs in human resources (HR) and recruiting. Here, fraudsters use document fraud to pass job interviews and become employed at companies in order to access company intellectual property (IP), plant malicious code onto internal company systems, or be paid for jobs they are not qualified for.

Europe emerges as primary hotspot

In 2025, the European Union (EU) was the region the most hit, with nearly 10% of all verification attempts being fraudulent.

Year-over-year (YoY), the EU, combined with the UK, saw its annual mean fraud rate more than double, increasing by nearly 2.3 times. This surge is partly attributed to added regulations and compliance requirements, which have brought previously undetected fraud into view.

Of the fraudulent activity in the region, the majority involved misuse of ID cards, which accounted for 13% of attempted fraud. The figure is more than twice the rate associated with passports at 6%.

Globally, soaring adoption of digital technologies and fintech solutions has led to a surge in fraud and scams. In Singapore, there were 94 scam and fraud claims against digital banks in the first eight months of 2025, more than double the 42 claims for the whole of 2024, reported the Straits Times.

The total monetary amount for these 94 claims was SGD 2.5 million (US$2 million), with compromised credentials and impersonation scams being the most commonly reported cases.

Featured image by Who is Danny via Freepik