Digital identity firm Smile ID’s 2025 Digital Identity Fraud in Africa Report analyzed 110 million identity checks across Africa in 2024 and found that the continent’s overall fraud rate fell to 25%—a 4% drop from 2023—as biometric systems replaced text-based methods.
However, cybercriminals are exploiting weak KYC protocols and advancing AI tools to bypass defenses, causing millions in losses.
Regional disparities reveal distinct threats: East Africa saw the highest document fraud rejection rate at 27%, driven by reliance on government-issued IDs, while West Africa emerged as a hotspot for biometric fraud with spikes in AI-generated face spoofs.
Central Africa’s fraud rejection rates climbed 3% to 22%, signaling rising sophistication, and Southern Africa’s rates jumped from 9% to 21% as criminals exploited outdated identity documents like South Africa’s retiring “green book.”
The firm emphasized the dual role of AI in both enabling and combating fraud, noting that while criminals deploy deepfakes, security teams can leverage global threat intelligence and automation to counter attacks.
They identified insider-assisted account takeovers and identity farming—the creation of synthetic profiles using stolen data—as critical risks, urging tighter collaboration between fintechs, governments, and tech providers to disrupt laundering networks.
The report highlights the urgency for African businesses to modernize legacy systems and adopt adaptive AI defenses. Fintechs with lax KYC processes remain most vulnerable to synthetic identity schemes, which conceal illicit funds.
The findings stress that sustaining Africa’s digital financial growth will require proactive investment in AI-driven security frameworks to outpace fraudsters increasingly armed with generative tools.