Identity Fraud Is Costing Enterprises Millions—But Smarter Security Doesn’t Have to Hurt UX

The numbers are in—and they’re unsettling. According to a new global study by security heavyweight Entrust and e-signature leader Docusign, identity fraud is no longer just a compliance issue or IT problem. It's a full-blown financial crisis for enterprises—and one that's escalating in both scale and sophistication.

The Future of Global Identity Verification report, compiled by TL;DR Insights, surveyed over 1,400 business and IT decision-makers across nine countries. The key takeaway? Identity fraud is surging, and outdated authentication methods are leaving organizations exposed.

More than two-thirds of respondents (69%) reported an increase in fraud attempts over the past year. For large organizations—those with over 5,000 employees—the price tag is steep: an average $13 million in annual direct fraud costs. For the biggest enterprises, those costs balloon. Among organizations with over 10,000 employees, one in five reported identity fraud costs north of $50 million annually when factoring in both direct and indirect impacts.

Passwords Are the Weak Link

The usual suspects are underperforming. Traditional username and password logins were reported as the most frequently targeted attack vector, with 51% of respondents identifying them as the weakest link in their security chain. On the other end of the spectrum, advanced methods like facial biometric liveness detection saw only 21% of fraud attempts, pointing to a growing consensus around the effectiveness of modern identity verification (IDV) tools.

"As identity fraud escalates, enterprises are increasingly pressured to strike the right balance between security and seamless user experiences,” said Mangesh Bhandarkar, Group VP of Product at Docusign. “This global study reinforces a critical truth: Stronger security doesn’t have to come at the cost of customer experience—in fact, it enhances it.”

The ROI of Smarter Security

Despite ongoing concerns about adding friction to the customer journey—58% of respondents voiced this as a key hesitation—organizations investing in robust IDV solutions are seeing tangible payoffs.

Among the study’s most compelling data points:

• 70% of respondents believe technology investments are the best defense against fraud

• 74% plan to increase IDV investments in the future

• Organizations that went all-in on IDV solutions saw average savings of $8 million

  
  

High investors in IDV were significantly more likely to reduce fraud (1.7x), gain a competitive edge (2.7x), and report stronger brand perception (1.6x) compared to those who underinvested.

“A misconception about fraud prevention is that stronger security comes at the cost of user experience,” said Tony Ball, President of Payments & Identity at Entrust. “Modern IDV solutions and adaptive authentication enable them both. End-users can verify their identity with a quick biometric selfie, while fraud checks such as device recognition [and] AI-powered deepfake detection run in the background.”

Biometrics and Behavioral Signals: The New Standard?

The report paints a clear picture of where enterprise security is headed: passive, intelligent, and adaptive. Organizations are increasingly embracing behind-the-scenes fraud detection powered by AI, behavioral analysis, and biometrics—technologies that balance trust with convenience.

Adaptive authentication, in particular, is gaining traction. This dynamic approach modifies security requirements based on real-time risk signals—tightening controls when needed, and relaxing them when risk is low. It’s a model tailor-made for today's threat landscape, where fraudsters are leveraging AI just as aggressively as defenders.

The Bigger Picture

The surge in identity fraud isn't happening in a vacuum. As enterprises race to digitize everything from customer onboarding to backend workflows, digital identities have become the new currency—and the new attack surface. For cybercriminals, a breached identity is a skeleton key.

That’s why a growing number of companies are now viewing identity verification as a business enabler, not just a security checkbox. In a digital-first economy, trust is everything. And for modern organizations, that trust starts with making sure the person on the other end of the screen is exactly who they claim to be.