The persistence problem: why 1 in 3 synthetic IDs now reappear
We’ve reached the point where synthetic IDs can officially be considered the fraudster’s favourite tool.
Now holding a 50% share of all identity fraud – the UK’s most-reported type – synthetic ID fraud is amongst the fastest-growing crimes financial services organisations fight.
It grew 36% across the board last year, and up to 152% in some credit products.
But the real confirmation of synthetic ID dominance is in how they’re used.
The proof is in the persistence
New Signals research by Synectics of National SIRA data shows that 1 in 3 synthetic IDs are used repeatedly. 40% more than just one year ago, and the latest surge in a longstanding upward trend.
Although not yet a runaway train, the synthetic trajectory certainly warrants attention.
All the more so because within repeat use, banks, lenders and insurers see mounting evidence that synthetics are settling into portfolios.
From settling in to busting out
We are seeing sophisticated fakes - deployed as part of multi-layered organised activity - entering via lower-scrutiny products like home insurance. By targeting lower-scrutiny controls first, fraudsters can settle in and build a legitimate-looking history before eventually “busting out” into higher-value credit products.
While counter-fraud and AML teams are better equipped than ever to spot these identities, the challenge is shifting. As AI improves the quality of these fakes and automates threshold testing, we must adapt urgently to prevent this persistence from becoming a permanent threat.
The risk of inaction is that these high-quality synthetics remain active on customer books, and distort our understanding of the portfolios meant to be a source of truth.
When the foundation fractures
As approved synthetic IDs build transaction history, they begin to shape the environment around them. When this happens, our ability to truly "know" our customers - their behaviours, needs, and risk levels – begins to break down.
The consequences are inevitable. Increased direct fraud losses, downstream defaults, and laundering cases to name a few.
But there is also a hidden casualty: the “synthetic-adjacent” genuine customer. This is the thin-file individual who, despite being legitimate, is mistakenly mistreated because their profile features mirror those of a synthetic.
A shift to lifecycle defence
The trajectory is concerning, but there is still time to adapt. However, the latest data shows that to do so successfully, our identity fraud strategy must move beyond the point of application. To truly tackle the sophistication of synthetic ID fraud, focus should now shift to the entire customer journey and the nuances of the account lifecycle.
Many of our client strategies are heading in that exact direction.
Mapping the next wave of progress
Beyond the front door: Strong controls at application remain critical, but they are only one point in a much longer journey.
Continuous signal monitoring: Many of the highest-risk decisions now depend on how signals are interpreted and acted on over time, not just at application.
Breaking down silos: Reviewing onboarding and product journeys to ensure data flows freely between teams, preventing synthetics from hiding in the gaps.
Back-book intelligence: Implementing retrospective screening to qualify existing exposure and flush out sleepers already embedded in portfolios.
Pattern recognition: Identifying repeat offending patterns and cross-sector links to spot the multi-layered footprints of organised synthetic networks.
Disrupting the synthetic journey
A threat this multidimensional and persistent requires a view that is equally granular and connected. We must understand the web of connections an identity forms as it moves across the financial ecosystem.
In doing so, we ensure that less synthetics “settle in”, and more are actively pushed out.
The new Signals report from Synectics provides a deeper look into these very patterns and connections, mapping the reality of synthetic movement across sectors today.
