AI Proves Both Poison & Antidote As Gen AI Fuels New Wave Of Fraud In Africa
The battle between fraudsters and digital security players in Africa has entered a new era, and the latest frontline is artificial intelligence. Smile ID’s newly released 2025 Digital Identity Fraud in Africa Report paints an alarming picture: AI-powered fraud is escalating at an unprecedented pace, with deepfake incidents surging sevenfold in the last two quarters of 2024 and biometric fraud attempts reaching a three-year high.
Fintech platforms, which have powered Africa’s digital economy, are now scrambling to defend themselves against increasingly sophisticated attacks that exploit vulnerabilities in biometric verification systems.
The report, based on 110 million identity verification checks across Africa by notable KYC provider Smile ID, reveals that fraudsters are leveraging Generative AI and deepfake technology to bypass biometric security measures, with AI-driven selfie anomalies accounting for 34% of emerging biometric fraud tactics last year.
A viral case in Hong Kong saw an employee transfer USD 26 M after being duped by deepfakes of colleagues over a video call, including the company’s chief financial officer. And last year, Luno, a licensed financial services provider in South Africa and a major crypto investment app, was on high alert after a deepfake scam targeted one of its employees.
West Africa has become the epicentre of biometric fraud, where spoofing and face-match inconsistencies have soared, while East Africa now leads in document fraud cases. The numbers are staggering: authentication attempts showed four times higher fraud rates compared to new user registrations, indicating a significant increase in account takeover attempts. And the attacks are getting smarter, with fraudulent activity peaking late at night—between 7 PM and 3 AM GMT, with the highest concentration at 11 PM.
The arm-wrestling between fraudsters and security professionals is intensifying, but so is the response. Smile ID’s findings suggest that while biometric verification has made it harder for fraudsters to operate, they have adapted their tactics accordingly.
The overall fraud rate in KYC checks dropped to 25% in 2024—a 4% improvement year over year—yet fraudsters have become more targeted, using insider-assisted schemes and identity farming to game the system. Fintechs with weak KYC protocols remain particularly vulnerable, as bad actors create fake accounts to obscure illicit financial activities.
Smile ID’s CEO, Mark Straub, sees AI as both the problem and the solution. “The future of fraud prevention lies in adaptability,” he says. “While AI provides fraudsters with powerful new tools, it also helps security practitioners harness global intelligence to counter zero-day attacks and automate processes that were once manual.”
One of the most effective countermeasures so far has been mobile SDK-based fraud detection, which has proven twice as effective as other integration methods, achieving a 68% success rate in blocking fraud attempts. But technology alone won’t solve the issue.
The report harps on the need for stronger collaboration between governments, fintechs, and security providers to create a standardised framework for identity verification across the continent. Without it, businesses will continue to haemorrhage millions of dollars to fraud each year, Smile ID warns, undermining trust in Africa’s digital financial ecosystem.
Novel solutions designed to withstand AI-generated fraud attempts offer a glimpse into how the fight against digital fraud is evolving. But as fraudsters continue to refine their methods, the report warns that complacency could have dire consequences.
