Perceived Confidence vs. Reality in Identity Fraud

Are businesses overly assured about their capabilities to combat identity fraud? Recent data suggests this could be the case. While numerous European enterprises trust they are adequately handling the issue, many fail to monitor its impact rigorously.

As per a survey conducted by Signicat and Red Goat Cyber Security in The Battle in the Dark 2025, only 5% of participants acknowledged any doubt regarding their identity fraud prevention strategies. Around three-quarters believed they were making strides against it—despite the fact that 47% did not track fraud consistently.

“Part of the challenge with fraud lies in what goes undetected,” stated Jennifer Pitt, Senior Analyst for Fraud Management at Javelin Strategy & Research. “Consumers who do not report fraud due to various reasons contribute to an illusion that existing fraud controls are effective.”

A Widening Gap

These statistics further diverge from European businesses’ estimates, which indicate that nearly one in five transactions is fraudulent. Identity fraud and its related costs impact up to 22% of their annual revenue.

Furthermore, these figures are on the rise. Signicat reported a 69% increase in identity fraud attempts over the past four years, with overall fraud attempts jumping by 88%.

Challenges in Detection

Identity fraud constitutes 9.3% of all fraud attempts this year and is the most common type in Europe. Account takeover and social engineering rank second and third, respectively. The research indicated that identity fraud was prevalent in the banking sector, while in payments, account takeover emerged as the primary tactic.

“Some types of fraud, such as account takeover and synthetic identity fraud, are harder to detect,” Pitt explained. “Organizations might be missing these kinds of threats if they rely on just one detection method instead of a layered approach needed for combating more advanced forms of fraud.”

The survey also noted that 80% of businesses think pushing back against criminals only incites them to change tactics. This ongoing adaptation poses a significant challenge in the fight against fraud.

“Fraud is evolving faster than current detection systems can keep up,” Pitt added. “Organizations still using outdated and fixed methods could be overlooking newer, more sophisticated threats. Consequently, this false security leads to underreporting of actual fraud cases.”