AI is fueling a new wave of fraud–Is the Philippines ready?
If you have ever signed up for a digital service—whether it is a bank, loan app or e-commerce site—you have probably gone through some kind of identity check.
Most of us have been taught to trust these processes, assuming they’re secure and foolproof.
But here’s the thing—not all identities being verified today are real.
Increasingly, fraudsters are leveraging generative artificial intelligence (AI)—a category of AI that creates new content based on user prompts—to create highly convincing content such as text, images, video, including fake passports, IDs and even biometric data.
Using generative AI for fraud makes these schemes more difficult to detect.
According to Sumsub’s latest Q1 2025 internal statistics, drawn from millions of identity verification checks conducted globally between Q1 2024 and Q1 2025, synthetic identity document fraud in the Philippines surged by 291 percent compared to last year.
That is the second-highest jump in Asia-Pacific, and one of the highest globally. This is not just another statistic; it is a wake-up call for businesses, financial institutions, and platforms that rely on digital verification to onboard users.
Shifting fraud landscape
The rise of generative AI has made it easier than ever for fraudsters to create highly convincing fake identities, with synthetic fraud rapidly emerging as the new norm.
Just this month, for example, Sen. Bam Aquino fell victim to a deepfake scam, a type of generative AI fraud where his likeness was used to endorse an investment scam.
This incident underscores how fraud tactics are evolving, with synthetic fraud quickly becoming the new norm.
Unlike traditional fraud methods that rely on stolen credentials or forged documents, synthetic identities are crafted using a mix of fabricated details, such as AI-generated photos and fake addresses, and fragments of real personal information.
This shift is especially concerning in markets like the Philippines, where digital onboarding is expanding rapidly across financial services, fintech and crypto sectors.
According to Sumsub’s latest data, while traditional document forgery and biometric spoofing are on the decline, synthetic identity document fraud is surging—exposing gaps in legacy fraud prevention systems and challenging the effectiveness of traditional Know Your Customer processes.
Why the Philippines is a key target
The Philippines is one of Southeast Asia’s fastest-growing digital markets.
With an increasingly tech-savvy population and rising demand for online services, the environment is ripe for both innovation and exploitation.
The financial sector, in particular, is at a pivotal moment. The Bangko Sentral ng Pilipinas has forecast double-digit growth in assets, loans, deposits, and net income for Philippine banks over the next two years.
But with growth comes risk. Sumsub’s Q1 data shows a 78-percent increase in fraud across traditional financial institutions in Asia-Pacific, making it clear that even established players are vulnerable in this evolving landscape.
Unfortunately, many banks and fintechs in the Philippines operate under the assumption that fraud risk ends once a user successfully passes onboarding.
In reality, Sumsub’s internal data shows that 70 percent of fraud occurs after onboarding—often when systems are no longer actively monitoring user behavior.
This makes continuous, end-to-end monitoring essential, particularly for regulated sectors such as financial services, which already face heightened scrutiny from local authorities.
Securing the future of PH digital economy
As the Philippines accelerates toward a more digital future, the integrity of its digital economy will increasingly depend on how effectively it tackles emerging threats like synthetic identity fraud.
Combating synthetic identity fraud requires more than incremental updates—it demands a shift toward multi-layered, AI-powered verification systems.
These systems can detect inconsistencies across biometric, behavioral, and document-based data in real time, allowing businesses to catch fraud before it enters their ecosystem.
But technology alone isn’t the answer.
As new threats continue to emerge, collaboration between private companies, regulators and technology providers will be critical in building a resilient digital environment.
For organizations in the Philippines, the message is clear: staying ahead of fraud requires more than reacting to threats; it requires anticipating them.
By investing in the right tools and partnerships today, we can help secure the digital future of the country and create safer, more trusted experiences for everyone.
Penny Chai is Vice President for Asia-Pacific of Sumsub, a leading global company in ID verification solutions. Its local clients include Nexus Technologies (IT reseller), InDrive (transportation provider), TransferGo (international money transfers) and TELUS Digital (customer service outsourcing)
