Are businesses overly optimistic about their capacity to combat identity fraud? Recent findings suggest they might be. Despite numerous European firms asserting effective measures against the issue, many fail to consistently monitor its repercussions.

According to a survey by Signicat and Red Goat Cyber Security titled
The Battle in the Dark 2025, only 5% of participants reported lacking confidence in their identity fraud protocols. About three-quarters consider themselves victorious against the threat—yet, 47% do not keep track of fraudulent activities consistently.

“One challenge with fraud is that you might miss something if you don’t monitor it,” observed Jennifer Pitt, a Senior Analyst for Fraud Management at Javelin Strategy & Research. “If consumers aren’t reporting cases of fraud due to various reasons, it can create an illusion that the organization’s fraud controls are functioning well.”

A Growing Concern

These statistics become even more alarming when considering European businesses’ estimates: one in every five transactions is fraudulent. Identity fraud and its associated costs impact up to 22% of their annual revenue.

Furthermore, the issue continues to escalate; over the past four years, attempts at identity fraud have surged by 69%, while overall fraud incidents have risen by 88% according to Signicat’s data.

Challenges in Detection

Identity fraud currently constitutes 9.3% of all fraud occurrences this year, making it the most frequent form of fraud in Europe. Account takeover and social engineering follow as the second and third most common methods. The study highlights that identity fraud is the predominant method in banking, whereas in payments, account takeover is more prevalent.

“Some types of fraud, such as account takeover and synthetic identity fraud, are harder to detect,” explained Pitt. “Organizations might not even realize it’s happening if they rely solely on one detection method rather than a layered approach needed for combating more sophisticated threats.”

The study also revealed that 80% of businesses believe pushing back against criminals merely prompts them to adopt new strategies, presenting a significant challenge in the perpetual fight against fraud.

“Fraud is advancing at a faster pace than detection systems can adapt,” noted Pitt. “Organizations still using outdated and static methods might miss newer and more advanced types of fraud threats, leading to an unfounded sense that their current measures are effective when in fact, they are not detecting fraud.”