Pay360: Sumsub Warns of Evolving Fraud Landscape
In an exclusive interview with FinTech Magazine at Pay360, Thomas Taraniuk, Head of Partnerships UK at Sumsub, shared insights into the evolving fraud landscape confronting financial technology firms.
The cat and mouse game of modern fraud
"It is very much a game of continuous cat and mouse whereby fraudsters create solutions to bypass systems, and we develop barriers and technologies to stop them in their tracks," says Thomas.
This ongoing battle has intensified as fraud rates in the fintech sector have grown by a staggering 156% year-on-year in 2024.
The rise of deepfake technology poses a particularly concerning threat, with Sumsub's report indicating a fourfold increase worldwide and 118% specifically in the UK.
While verification systems typically focus on the onboarding process, Thomas emphasises a critical blind spot: "Liveness detection helps detect deepfakes at the very start of the journey, ensuring through face mapping that users are who they say they are.
"But 76% of fraud happens after onboardingâfor purposes like money washing, money laundering, and money mulling."
"We all know maybe 100 people through work or personal life, and one of them is going to be connected within that [fraud] network"
Inside fraud networks: A growing concern
Perhaps most alarming is the revelation that "every 100th individual using digital platforms is involved in fraud networks," according to Sumsub's research. This statistic brings the threat uncomfortably close to home.
"We all know maybe 100 people through work or personal life, and one of them is going to be connected within that network," Thomas explains.
"Individuals are targeted for these networks through different means, but it all comes down to the same purposes—either fiscal gain, which we see across the fintech industry and traditional finance, or ideological and political motivations."
Recruitment into these networks follows predictable patterns, primarily through digital channels.
"Individuals are targeted through a number of methodologies, usually through digital platforms. We're talking about messaging apps like Discord, WhatsApp, Telegram, or through job advertisements for phishing as well," notes Thomas.
"AI is often called a double-edged sword. Specifically, it's a paradox—we're using AI now to fight AI"
The rise of Fraud-as-a-Service
The democratisation of fraud tools has made attacks more accessible and devastating. Sumsub reports that with just US$1,000 investment and one month of time, fraud gangs can inflict US$2.5m in losses through Fraud-as-a-Service (FaaS) operations.
This efficiency stems from the scalability of modern fraud tools. "As Fraud-as-a-Service grows, more people have access to scalable solutions which, when pieced together, can commit hybrid attacks on fintechs, banks and other businesses," Thomas warns.
The response to these evolving threats requires matching sophistication with sophistication. "AI is often called a double-edged sword. Specifically, it's a paradoxâwe're using AI now to fight AI," says Thomas.
"With the regulatory pressure we're seeing, including the new EU AI Act coming into place, more businesses can enhance their user journeys while simultaneously protecting their users and their businesses."
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