A new joint research report from Mitek Systems and Datos Insights indicates that synthetic identity fraud is rapidly becoming one of the most significant systemic threats confronting financial institutions. The widespread adoption of generative artificial intelligence, combined with the intertwining of organized crime networks and synthetic identities, is reshaping the fraud risk landscape, compelling financial institutions to reassess their strategies for the era of AI-driven fraud.
This study is based on survey data from 114 anti-fraud executives across North America and globally, along with in-depth interviews with leaders in the fraud prevention field. The findings reveal that synthetic identity fraud has evolved beyond traditional application fraud, transforming into a catalyst for financial crime across multiple channels including credit, deposits, and check fraud.
Key insights from the report include: 84% of anti-fraud executives view synthetic identity fraud as a high or medium risk within the application process; U.S. unsecured credit losses grew from $1.8 billion in 2020 to approximately $2.94 billion in 2025; synthetic identity fraud is expanding at an annual rate of roughly 16%; 55% of anti-fraud executives reported that first-party check fraud losses continued to rise in the first quarter of 2025; and 40% of financial institutions have already observed an increase in AI-related attack rates, with most expecting this trend to persist.
Garrett Gafke, Chief Operating Officer of Mitek, stated that AI-driven fraud tactics, organized criminal activity, and scalable identity manipulation are altering the economic model of fraud. Financial institutions require identity verification and fraud prevention strategies capable of detecting risks earlier and adapting more swiftly.
Trace Fooshée, a Strategic Advisor at Datos Insights, noted that as generative AI reduces the cost and difficulty of creating convincing synthetic identities, financial institutions are being forced to reconsider how identity is verified at account opening. Institutions that invest early in modern verification, behavioral analysis, and lifecycle monitoring capabilities will gain a significant advantage before fraudulent activities spread to the broader financial ecosystem.
The report, titled "The Synthetic Identity Crisis: Detection, Prevention, and the AI Arms Race," is based on quantitative survey data collected by Datos Insights throughout 2025, incorporating feedback from anti-fraud executives in North America, Europe, Latin America, the Middle East, and the Asia-Pacific region.
Headquartered in San Diego, Mitek Systems specializes in digital identity verification and fraud prevention, with its technology used by over 7,000 organizations globally to secure digital interactions.
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