Latest news with #MarkStraub
Associated Press
29-01-2025
- Business
- Associated Press
Gen AI is Fueling a New Wave of Fraud in Africa, 2025 Smile ID Report Reveals
CAPE TOWN, South Africa, Jan. 29, 2025 /PRNewswire/ -- Smile ID, Africa's leading provider of identity verification solutions, has released its 2025 Digital Identity Fraud in Africa Report, highlighting critical fraud trends across the continent. The report uncovers sophisticated fraud tactics exploiting vulnerabilities in fintech platforms and digital ecosystems, accelerated by emerging technologies such as Generative AI, deepfakes, and insider-assisted schemes. The report also offers clear, actionable strategies to help business leaders protect trust, revenue, and maintain operational stability in 2025. Drawing on anonymised data from over 110 million identity verification checks conducted by Smile ID across Central, East, West, and Southern Africa in 2024, the report highlights ongoing challenges and opportunities. The widespread adoption of biometric verification over traditional textual methods has significantly strengthened fraud prevention, driving the overall fraud rate during KYC checks down to 25% in 2024 (a 4-percentage-point decrease). However, this year-over-year progress has prompted fraudsters to develop more sophisticated attack methods targeting biometric systems, resulting in millions of dollars in fraud losses across key African markets. Smile ID continues to tackle unique threats African businesses face when onboarding users, such as identity farming, insider-assisted account takeovers, and advanced document forgeries. The report revealed significant regional variations in fraud methods across Africa. East Africa led in document fraud cases, reporting the highest combined rejection rate at 27% in 2024, driven by the region's reliance on documents. West Africa emerged as the epicentre of biometric fraud, showing the highest incidents of spoofing and face-match inconsistencies, with notable vulnerability to AI-powered fraud attempts. Central Africa maintained a rejection rate of 22% [up by 3%], while Southern Africa saw rates rise from 9% to 21%, primarily attributed to fraud attempts involving the retiring green book. Speaking on the report, Mark Straub, CEO of Smile ID, said: 'The future of fraud prevention lies in adaptability. While AI provides fraudsters with powerful new tools, it also helps security practitioners harness global intelligence to counter zero-day attacks and automate processes that were once manual. 'Fintech platforms with weak KYC protocols remain the most vulnerable, as these bad actors use identity farming to create fraudulent accounts that conceal the origins of illicit funds. Tackling these vulnerabilities requires collaboration between industries, governments, and technology providers to create a safer digital ecosystem.' Founded in 2017, Smile ID has revolutionised identity verification in Africa, completing over 200 million verification checks by November 2024. As the continent's leading provider of digital identity verification, fraud detection, and KYC compliance solutions, the company delivers scalable, Africa-focused tools optimised for real-time onboarding, anti-fraud measures, and AI-driven identity verification. here.
Yahoo
29-01-2025
- Business
- Yahoo
Surge in deepfakes heightens fraud risk for African businesses
Generative artificial-intelligence was behind more than a third of new biometric fraud cases in Africa last year, a report found, with a surge in deepfakes threatening the data of millions of consumers whose details are held on insecure systems. Deepfake videos used to impersonate people increased sevenfold in the second half of 2024, according to data from the Lagos-based digital verification company SmileID. The seven-year-old startup vets customer identities for hundreds of businesses on the continent including Uber. Smile ID found document forgery remains a sizable aspect of identity fraud, especially in East Africa where the crime rose by six percentage points last year. But generative AI has 'radically' increased manipulation opportunities, posing fresh challenges for security and anti-money laundering enforcement, chief executive Mark Straub told Semafor. One crime syndicate that operated on Telegram and communicated in Chinese ramped up attacks on African companies in 2024. The gang was 'a substantial, coordinated ring of attackers that were sharing hacking tools' to target fintechs on the continent as well as companies in Germany and Singapore, he said. The hackers' IP addresses suggested their locations were 'not within Africa' and their efforts seemed geared towards creating accounts they could use to move money, Straub added. Activity from the group declined after the US Federal Bureau of Investigation and African law enforcement bodies were notified by SmileID, he said, but 'there are many more out there.' Growth in smartphone ownership and internet access in Africa has sped up demand for digital banks, e-commerce stores, and ride-hailing apps. But the risk of fraud that hovered over analog systems is being carried over into the digital transition. About 500 million people lack any legal ID documents in sub-Saharan Africa. But in countries where digital IDs are being introduced, some companies have failed to follow best practice, setting up ID systems before data protection and cybersecurity frameworks are in place, for instance, and exposing those systems and their users to hazards and losses. In South Africa, frequent ID requests from government agencies and service providers leave paper trails that increase the chances of identity theft, said Martin Grunewald, an executive at the verification company Secure Citizen. And the amount Nigerian financial institutions lost to fraud rose nearly six-fold to 18 billion naira ($11 million) in 2023. NIBSS, the agency that published the data, said fraud losses rose in line with the rise in digital payments. Generative AI raises the prospect of more losses from fraud in Africa. While deepfakes accounted for 7% of global identity fraud attempts, according to the London-based verification company Sumsub, this was a four-fold rise from 2023. Only the Middle East recorded a larger increase in deepfake identity fraud incidents than Africa in 2024, Sumsub found. The rise in generative AI and identity fraud has presented a lucrative business and investment opportunity for the companies working to counter it in Africa. SmileID is backed by venture capital, raising about $27 million over the past four years from Silicon Valley and African investors. YouVerify, a competitor partly based in Nigeria, has raised $5 million in recent years from a venture fund including the French telecoms giant Orange. Projections for the future size of the global identity verification market — which these startups are aiming for — range from $27 billion to $47 billion. 'Doing KYC [Know Your Customer verification checks] used to be just a compliance exercise,' Straub said. 'It really now is a security workstream [concern]. That's the big change for us.'
