Deepfake fraud market hits USD $40 billion, report says

identifAI has published its first report estimating that deepfake-enabled financial fraud has grown into a USD $40 billion annual market. The study identifies video and voice cloning as the main forms of synthetic fraud.

Video synthesis accounts for 42.7% of observed cases and audio-based voice cloning for 21.9%, giving the two methods a combined 64.6% share of deepfake fraud tracked in banking, insurance and corporate settings.

The research, which tracks global incident telemetry through August 2026, argues that synthetic media has moved beyond consumer internet hoaxes into attacks on financial controls, remote onboarding and internal payment processes. It describes a market in which criminal groups use ready-made fraud toolkits and virtual camera injection software to evade older biometric and know-your-customer checks.

The report identifies the United States as the largest target and source of deepfake fraud incidents at 34.1%, followed by India at 7.7% and the UK at 6.6%. It also identifies social media as a major source of raw material for fraudsters, with X accounting for 42.1% of reconnaissance activity and LinkedIn 14.5%, as attackers gather public video and audio of senior executives to train generative AI models.

Fraud shift

One of the report's central findings is that identity fraud now represents 17.6% of incidents and that synthetic media causes one in every 100 identity verification check failures worldwide. This points to a shift away from conventional text-based phishing towards impersonation using cloned voices, manipulated video and fabricated identities.

To illustrate the financial impact, the report highlights several incidents. They include a USD $25.6 million theft involving engineering group Arup, where a finance worker transferred HKD $200 million across 15 transactions after joining a live video call in which all participants, including the Chief Financial Officer, were deepfakes.

Other examples include an attack on ABN AMRO in which fraudsters used identity morphing and deepfake liveness bypasses to open 46 fraudulent accounts before detection. The report also points to an attempted fraud involving Ferrari, where attackers allegedly used a cloned version of the Chief Executive Officer's voice in WhatsApp audio messages to request an unauthorised currency hedge transaction.

Regulatory focus

The publication comes as regulators in Europe and the US tighten scrutiny of synthetic media and impersonation risks. identifAI points to the EU AI Act's transparency and detection requirements, alongside US measures including the FTC Impersonation Rule and the TAKE IT DOWN Act, as signs that liability for synthetic deception is moving up the policy agenda.

The report also cites a 2025 Deloitte study that found nearly 70% of respondents worried synthetic content would be used to deceive them, nearly 60% struggled to distinguish AI content from human-made material, and 84% believed synthetic content should be clearly labelled.

For identifAI, that environment creates a commercial opening for tools designed to verify whether media is genuine before a transaction or decision is approved. The startup was founded by cybersecurity specialists Marco Ramilli and Marco Castaldo and says its software can determine whether audio, video or image content has been generated or manipulated using AI.

The business raised EUR €5 million in a funding round led by United Ventures in 2025, following an earlier seed round of EUR €2.2 million. Its management team includes Vice President EMEA Kate Burns and Commercial Director James Cashmore, with advisers including Justin Cooke and Jean-Pierre Levieux.

Human trust

The report also looks beyond current fraud cases to the use of autonomous AI agents in financial workflows. It argues that when users rely on software agents to execute routine instructions, manipulated media and false inputs could influence those agents before any payment reaches a bank or other institution.

This would shift the security question from verifying a person or device to verifying the authenticity of the information an AI system receives. In that model, synthetic deception becomes a risk not only for banks and insurers but for any organisation that uses automated decision-making to handle money, identity or approvals.

"This report establishes our inaugural global benchmark for tracking synthetic fraud. What emerges from our findings is that while the first generation of deepfakes fooled our eyes, the next generation is engineered to fool our financial systems, specifically targeting banks and insurance companies," said Marco Ramilli, Co-Founder and Chief Executive Officer of identifAI.

"Deepfake detection can no longer exist as a post-incident forensic tool. Instead, research shows it needs to be embedded as an active, zero-trust security layer inside every critical financial workflow. There is a massive opportunity for financial institutions to act early and hedge this growing risk," Ramilli said.

Kate Burns said the issue extends well beyond financial services. "Fraud used to need your password. Now it needs your face and a few seconds of your voice - and for most people, both are already online," said Burns, Vice President EMEA at identifAI.

"This isn't just a banking issue. The same attack works on a hospital, a council or a grandparent. The cost of faking a person convincingly has escalated, and our instinct to trust our own eyes hasn't moved at all. The cost of synthetic fraud is already being passed down to consumers through higher banking fees and insurance premiums, as financial institutions grapple with these new forms of threat," Burns said.

"Financial institutions across London and Europe are witnessing a fundamental pivot from basic credential theft to real-time synthetic identity injection," said Patrick Dawson, Founder and Chief Executive Officer of Wave Claims.

"identifAI's findings underscore that relying on human review during high-value wire transfers or remote onboarding is a major compliance vulnerability and has become a thing of the past. Today, corporates urgently need to invest in verification protocols that can outperform the latest fraud tech. In our view, it is a small cost to offset potentially massive losses," Dawson said.