Fraud risks drive tighter identity checks in digital services

Singapore recorded a 17.59% fraud signal rate, according to a report by Shufti Sphere.

Singapore’s expanding digital services are putting greater focus on identity verification as businesses face fraud risks and tighter regulatory scrutiny, according to a report by Shufti Sphere.

Singpass facilitates more than 41 million digital transactions each month. Across Asia-Pacific, identity verification is used for account openings, KYC checks, payment authentication, lending decisions, and marketplace seller onboarding.

Singapore recorded a 17.59% fraud signal rate in Shufti’s internal identity verification data sample. The company said fraud rates varied across the region, with some of the highest rates per 1,000 verifications recorded in digitally mature economies.

The risks are also drawing greater regulatory attention in Singapore. The Monetary Authority of Singapore’s September 2025 information paper on cyber risks associated with deepfakes raised supervisory expectations around AI-generated identity fraud, synthetic media, and remote onboarding.

The paper highlighted the need to protect non-face-to-face verification processes against manipulated video, impersonation, and deepfake-enabled attacks.

Across APAC, businesses are also dealing with deepfake injection, synthetic identities, and forged documents as digital commerce, payments and public digital infrastructure expand. The region contributes nearly 60% of global economic growth, whilst social commerce and real-time payments continue to scale.

Shufti said identity verification providers face challenges in supporting the region’s wide range of identity documents and writing systems. Many OCR systems are built around Latin alphabets and Western identity documents, creating difficulties when processing scripts including Chinese, Korean, Thai, Khmer, Bengali, and Devanagari.

The company also said some verification providers rely on third-party technology for OCR, face matching and deepfake detection, which can make it harder to adapt systems to new fraud methods and regulatory requirements.

Poor verification can also affect customer acquisition and retention through onboarding friction, whilst successful fraud can result in losses linked to mule accounts, synthetic identities, fraudulent loans, and scams.

Singapore’s $3b-plus money-laundering case further highlighted the financial consequences of weak controls.

The case involved more than $3b in seized or frozen assets and led to $27.45m in combined composition penalties against nine financial institutions in 2025.