Mitek Systems has published new research in partnership with Datos Insights warning that synthetic identity fraud is rapidly evolving into one of the most serious systemic threats confronting financial institutions globally.
The joint report, drawing on survey responses from 114 fraud executives across North America and other regions including Europe, Latin America, the Middle East, and Asia-Pacific, alongside qualitative interviews with fraud management leaders, found that 84% of fraud executives consider synthetic identity fraud a high or moderate risk to application processes.
US unsecured credit losses attributed to the threat reached approximately $2.94bn in 2025, up from $1.8bn in 2020, and the fraud type is expanding at a baseline annual rate of roughly 16%, fuelled by low-cost access to stolen or fabricated identity data. A further 55% of fraud executives reported increases in first-party check fraud losses in 2025, while 40% of financial institutions said they had already observed higher attack rates linked to generative AI, with most anticipating that trend to continue.
The research highlights how synthetic identity fraud has broadened well beyond traditional application fraud, now functioning as an enabler of financial crime spanning credit, deposit, and check fraud channels. Rather than isolated incidents, synthetic identities are increasingly being deployed to build long-term fraudulent accounts that can be exploited across multiple products and channels over time, creating compounding financial and operational risks for institutions relying on fragmented detection approaches.
Mitek Systems helps businesses verify identities, prevent fraud, and deliver secure digital experiences. The company serves more than 7,900 financial services organisations and FinTech brands globally, offering products including Mobile Verify and Mobile Deposit. Datos Insights is a research and advisory firm focused on the financial services sector.
The research report, titled “The Synthetic Identity Crisis: Detection, Prevention, and the AI Arms Race,” was based on quantitative survey data collected by Datos Insights from fraud prevention leaders at US and global financial institutions throughout 2025, supplemented by qualitative interviews examining emerging fraud trends and strategic priorities.
Mitek Systems chief operating officer Garrett Gafke said, “These findings reinforce what fraud and risk teams are already seeing firsthand: synthetic identity fraud has become an industrialized threat. AI-enabled tactics, organized criminal operations, and scalable identity manipulation are changing the economics of fraud. Financial institutions need identity authentication and fraud prevention strategies that can detect risk earlier, adapt faster, and disrupt coordinated attacks before losses compound.”
Datos Insights strategic advisor Trace Fooshée said, “Synthetic identity fraud is a strategic control point for financial institutions because it increasingly serves as the foundation for a wide range of downstream fraud activity. As generative AI lowers the cost and difficulty of creating convincing synthetic identities, institutions are being forced to rethink how they approach identity verification at enrollment. Organizations that invest early in modern verification, behavioral analysis, and lifecycle monitoring capabilities will be significantly better positioned to disrupt fraud before it scales across the broader financial ecosystem.”
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