APAC Firms Face Escalating Threat from Synthetic Identity Fraud

Businesses across the Asia-Pacific (APAC) region are encountering a rapidly evolving fraud landscape, as cybercriminals adopt increasingly sophisticated techniques that blend synthetic identities with advanced automation. The growing scale and complexity of digital fraud are placing significant pressure on organisations to strengthen their cyber resilience and modernise risk management strategies.

Insights from the LexisNexis Risk Solutions Cybercrime Report 2025, based on the analysis of approximately 116 billion global transactions, reveal a striking surge in synthetic identity fraud. This category has increased eightfold within a year and now represents 11% of all digital fraud cases worldwide. The trend signals a fundamental shift in criminal methodology, with perpetrators moving beyond traditional identity theft towards the creation of entirely new, highly convincing digital personas.

Synthetic identity fraud involves combining authentic personal information—such as identification numbers, addresses, or contact details—with fabricated data to construct false identities. Often described as “Frankenstein identities”, these profiles pose a unique challenge because they are not tied to real individuals. As a result, there is no immediate victim to report suspicious activity, allowing fraudulent accounts to remain active and undetected for extended periods.

Fraudsters are exploiting this vulnerability to bypass initial Know Your Customer (KYC) checks and establish seemingly legitimate relationships with insurers and financial institutions. Over time, these fabricated identities accumulate transaction histories that enhance their credibility. Once trust is established, criminals may execute high-value fraud, including exaggerated insurance claims or deliberate defaults, significantly increasing financial exposure for organisations.

Regional patterns highlight the uneven yet severe nature of the threat. In Latin America, synthetic identity fraud accounts for 48.3% of reported cases, making it the dominant form of fraud in the region. Globally, however, first-party fraud—where genuine customers misrepresent information for financial gain—remains the most prevalent category, comprising 38.3% of cases. This issue is particularly acute in Europe, the Middle East, and Africa (EMEA), where it contributes to more than half of all reported fraud incidents.

At the same time, automated cyberattacks are becoming more advanced and difficult to detect. The report identifies a 59% increase in malicious bot activity, with modern tools capable of replicating human behaviours such as cursor navigation, typing rhythms, and browsing patterns. These capabilities enable fraudsters to evade traditional behavioural analytics systems, rendering many existing detection methods less effective.

In APAC, the rapid expansion of digital services has been accompanied by a corresponding rise in fraud risk. The regional fraud attack rate has climbed to 1.7%, reflecting growing exposure as transaction volumes increase. Desktop browser-based attacks have seen a particularly sharp rise, as cybercriminals deploy sophisticated automation technologies to execute high-volume, coordinated fraud attempts.

This shifting threat landscape is prompting organisations to reassess conventional fraud prevention models. Rule-based systems, once considered adequate, are increasingly ineffective against adaptive and data-driven attack strategies. In response, businesses are investing in more advanced, multi-layered security frameworks that integrate artificial intelligence, behavioural analytics, and real-time monitoring to detect anomalies and respond proactively.

Strengthening identity verification processes has become a central focus. Enhanced KYC protocols, continuous authentication, and improved data-sharing across institutions are seen as essential measures to counter synthetic identity fraud. Equally important is the human element: employee training and heightened awareness remain critical in identifying suspicious activities that automated systems may overlook.

Looking ahead, the convergence of synthetic identity fraud and intelligent automation is expected to further reshape the risk environment. For insurers and financial institutions, success will depend on their ability to combine technological innovation with robust governance, regulatory compliance, and skilled human oversight. Without decisive action, the increasing sophistication of fraud schemes could undermine trust and stability across the global financial ecosystem.

Key Findings from the Cybercrime Report 2025

As digital ecosystems continue to expand and interconnect, organisations must adapt swiftly to an increasingly sophisticated threat environment. A proactive, layered approach—combining advanced technology, regulatory alignment, and human expertise—will be essential to safeguarding operations and maintaining trust in an era of escalating cyber risk.