Fraud Surge Threatens APAC Firms as Synthetic Identities Proliferate

Businesses across the Asia-Pacific (APAC) region are facing mounting cyber and financial crime risks as fraudsters deploy increasingly sophisticated tactics, including synthetic identities and human-like automated attacks. A sharp rise in digital fraud activity is prompting renewed calls for stronger cyber defences and more advanced risk management frameworks.

According to the latest LexisNexis Risk Solutions Cybercrime Report, synthetic identity fraud has surged dramatically in 2025, increasing eightfold on a global scale. Based on an analysis of approximately 116 billion digital transactions, this form of fraud now accounts for 11% of all detected cases, underlining its rapid emergence as a critical threat.

Synthetic identity fraud involves the creation of “Frankenstein” identities by blending genuine personal data—such as national identification numbers or addresses—with fabricated information. These hybrid identities are particularly difficult to detect because they do not correspond to a real individual, meaning there is no direct victim to raise an alert. As a result, traditional fraud detection systems often fail to identify suspicious activity at an early stage.

Criminal networks are exploiting this vulnerability by using synthetic profiles to pass initial Know Your Customer (KYC) checks, secure insurance policies or financial services, and gradually build credible transaction histories over time. Once these identities appear legitimate, fraudsters may file substantial claims or default on obligations, leaving insurers and financial institutions exposed to significant losses.

The scale of the threat varies by region. In Latin America, synthetic identity fraud now represents a striking 48.3% of all reported fraud cases, making it the dominant method of attack. Meanwhile, first-party fraud—where genuine customers deliberately misrepresent information for financial gain—remains the leading category globally, accounting for 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.

The report also highlights a sharp escalation in automated cyberattacks. Malicious bot activity has risen by 59%, with advanced tools now capable of mimicking human behaviour, including cursor movements and typing patterns. This level of sophistication allows fraudsters to bypass behavioural analytics systems that were previously effective in identifying non-human interactions.

In the APAC region, the combination of rapid digital adoption and evolving fraud techniques has created a complex risk environment. While digital transaction volumes continue to grow at pace, the fraud attack rate has climbed to 1.7%, signalling increased exposure for businesses operating in the region. Notably, attacks originating from desktop browsers have surged, as cybercriminals leverage more advanced automation frameworks to execute large-scale operations.

The convergence of these trends is placing pressure on organisations to rethink their approach to fraud prevention. Traditional rule-based systems are increasingly insufficient against adaptive threats that exploit both technological loopholes and human behaviour. As such, businesses are being urged to invest in multi-layered security strategies, combining artificial intelligence, behavioural analytics, and real-time monitoring to detect anomalies more effectively.

Industry experts also emphasise the importance of strengthening identity verification processes. Enhanced KYC protocols, continuous authentication, and improved data-sharing mechanisms between institutions could help mitigate the risks posed by synthetic identities. At the same time, workforce training and awareness remain critical in identifying suspicious patterns that automated systems may overlook.

Key Findings from the Cybercrime Report 2025

As digital ecosystems expand and fraudsters refine their methods, the insurance and financial services sectors face a pivotal moment. The ability to detect and prevent increasingly complex fraud schemes will depend on a combination of technological innovation, regulatory alignment, and organisational preparedness. Without decisive action, the growing sophistication of synthetic identity fraud and automated attacks could erode trust and stability across the global financial system.