Africa-Press – Kenya. The number of fraud cases reported in the country from fake identification attempts grew from 10 to 17 per cent in the first six months this year, Smile ID now says.
In its report dubbed ‘The State of KYC in Africa’, the firm says the fraud numbers are rising again in the country, after seeing record-low numbers in the second half of 2022.
It however says, even though there has been a significant increase, fraudulent onboarding attempts are still below the figures recorded in the first half of last year.
“The recent increase in fraud attempts makes Kenya the highest-risk country for ID fraud compared to the other countries analysed, a position it has not held since 2022,” Smile ID says.
Smile ID is a continental identity verification and digital Know Your Customer (KYC) provider, dedicated to enabling secure and seamless digital interactions for businesses and individuals across the continent.
It is mandated to empower organisations comply with KYC regulations, mitigate risks and build trust in the digital ecosystem.
Fraud cases emanating from selfie spoofs, where scammers with stolen IDs attempt to pass themselves off as the owners of the documents by using a photo to impersonate someone else, was about 35 per cent in the period under review.
Those from face mismatches, where a valid ID number is provided, but facial biometrics do not match the ID, was about 55 per cent.
Cases from fraudulent IDs accounted for about 11 per cent.
Generally across the continent, the firm says fraudulent onboarding attempts fell in the priod under review compared to the previous year.
The total number of fraudulent KYC attempts caught decreased by five points to 23 per cent from a peak of 28 per cent in 2022.
Smile ID says the decline in fraud rates coincides with declining startup funding across the continent.
“Venture funding in Africa dipped by over 50 per cent year-on-year in the first half of 2023. More so, the number of startups that received funding dropped from 303 in H1 2022 to 131 in H1 2023,” Smile ID says.
“This decrease in funding has led to reduced marketing spend, especially incentive-based acquisition, which has been shown to have a high correlation with increased fraud attempt rates.”
However, the firm reiterates that with cybercriminals persistently adapting, businesses must stay vigilant in combating fraud.
“While referral fraud rates have dropped significantly, cybercriminals are still looking to exploit digital platforms to scam other users, or funnel illicit earnings.”
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