Businesses may be overestimating their ability to combat identity fraud based on recent data from surveys such as The Battle in the Dark 2025 report by Signicat and Red Goat Cyber Security. Despite a large proportion of respondents believing they are effectively managing this issue, many do not consistently monitor its impact.

A Lack of Confidence

Only 5% of businesses expressed doubts about their identity fraud processes in the survey. About three-quarters felt they were winning the battle against fraud, despite the fact that 47% did not track fraud incidents with regularity. Jennifer Pitt, Senior Analyst of Fraud Management at Javelin Strategy & Research, noted, With fraud, you can’t detect what you aren’t aware of or aren’t looking for. If consumers are not reporting fraud due to various reasons, it creates an illusion that the existing fraud controls are working effectively.”

Growing Concerns

The confidence levels among businesses appear even more misplaced when considering their estimates and experiences with identity fraud. European businesses expect one in five transactions to be fraudulent, which impacts up to 22% of their annual revenue. Over the past four years, there has been a significant rise in identity fraud attempts by 69%, while overall fraud attempts have increased by 88%. According to Signicat’s data.

Challenges in Detection

Identity fraud is the most common type of fraud in Europe, accounting for 9.3% of all fraud attempts this year. Account takeover and social engineering follow as the second and third most prevalent methods. In particular, identity fraud poses a significant challenge in the banking industry, while account takeover tactics are more commonly seen in the payments sector.

Pitt explained that certain types of fraud, like account takeover and synthetic identity fraud, are harder to detect. Organizations might not even be aware that such activities are occurring if they rely solely on one fraud detection method rather than using a layered approach necessary to combat sophisticated threats.”

Moreover, 80% of businesses believe pushing back against criminals only prompts them to change their tactics, highlighting the constant innovation and adaptability in fraudulent behavior. Pitt also pointed out that fraud is evolving faster than current detection systems can keep up. Organizations relying on outdated or static methods might miss newer fraud threats, leading to a false sense that their existing solutions are effective when in fact, fraud remains undetected.”

This persistent issue underscores the need for organizations to adopt more robust and adaptive strategies to address identity fraud effectively.