New research has revealed the escalating cost of identity fraud and the impact it has on organisations. The research, a joint global study by Entrust and Docusign, showed the trade-offs enterprises face between security and customer experience.
The Future of Global Identity Verification research report reveals that identity fraud is a growing threat globally and across industries, with over two-thirds (69%) of organizations reporting increased fraud attempts. Organisations with over 5,000 employees have an annual direct identity fraud cost of $13 million on average – and the costs grow by multiples as the size of organizations increases. Among organisations with over 10,000 employees, 20% have an annual direct and indirect identity fraud cost of over $50 million.
With the rise in AI-assisted fraud, attacks are becoming more sophisticated and frequent. In the report, 51% of respondents said fraud is more common when using username and password alone than any other user authentication method, highlighting the vulnerability of the most basic single-factor authentication. In contrast, 21% of organizations reported fraud attempts against facial biometric liveness detection, reinforcing the effectiveness of advanced authentication solutions.
Tony Ball, President of Payments & Identity at Entrust, said: “A misconception about fraud prevention is that stronger security comes at the cost of user experience. Modern IDV solutions and adaptive authentication enable them both. End-users can verify their identity with a quick biometric selfie, while fraud checks such as device recognition, AI-powered deepfake detection run in the background. Adaptive authentication completes the identity lifecycle security and further enhances security by adjusting requirements based on risk signals, ensuring protection without unnecessary friction.”
In response to evolving fraud tactics, organisations are increasingly prioritising advanced security, despite acknowledging the potential for added friction in the customer experience. While 58% of respondents expressed concern that stricter fraud controls might frustrate consumers, a clear majority recognise the benefits of investing in identity verification (IDV). Specifically, 70% believe that technology investment is the most effective way to mitigate the financial risks of identity fraud, and 74% plan to increase their IDV solution investments. Furthermore, organisations that have made substantial IDV investments reported average savings of $8 million. When compared to those with average or lower investment levels, high-investment organisations are 2.2 times more likely to realise savings, 1.7 times more likely to achieve a significant reduction in identity fraud, 2.7 times more likely to perceive a competitive advantage, and 1.6 times more likely to report a positive impact on their brand reputation.
“As identity fraud escalates, enterprises are increasingly pressured to strike the right balance between security and seamless user experiences,” said Mangesh Bhandarkar, Group Vice President of Product at Docusign. “This global study reinforces a critical truth: Stronger security doesn’t have to come at the cost of customer experience – in fact, it enhances it. By implementing intelligent, low-friction security measures that are part of the Docusign Identify portfolio, businesses can create the right balance between building trust, protecting customers, and driving long-term engagement in an increasingly digital world.”
The research clearly shows that enterprises need to recognise the need for robust IDV solutions to stay ahead of cybercriminals.
