Fraud-as-a-Service: Inside the Industrial Economy Reinventing Digital Crime

The New Retirement Reality

The "traditional" UK retiree is a vanishing demographic. As of 2026, the Office for National Statistics (ONS) and the DWP report that over 1.1 million UK pensioners now reside overseas. This isn't just a trend for high-net-worth individuals; it is a cross-demographic shift driven by global mobility and the search for lower costs of living.

However, the risk to pension schemes doesn't start at the point of retirement. It begins decades earlier.

The Rising Challenge of the Mobile Workforce

While pensioners moving abroad is a well-documented trend, a more systemic risk is quietly accumulating in the "deferred" category: The Young Mobile Workforce.

• The 75% Stat: Recent data reveals that 75% of UK emigrants are now under the age of 35. These are young professionals moving for global career opportunities.
• The "Digital Decay" of Small Pots: These individuals leave behind small, auto-enrolled pension pots. Within a few years of moving, their UK digital footprint (electoral roll, credit headers) begins to decay, making them "untraceable" by standard domestic methods.
• Fragmented Careers: By the time these workers reach retirement, they may have accrued numerous different pots. The administrative cost of managing these "lost" small pots – currently valued at a total of £31.1 billion in the UK – is a significant drain on scheme resources.

Three Growing Risks for Trustees

1. The Fiduciary "Out of Touch" Trap

A trustee’s duty of care does not end when a member moves overseas. Traditional UK-centric tracing is no longer a "reasonable endeavor" when a significant portion of the membership is international. Without global data, trustees cannot fulfill mandated disclosure requirements or support members in making informed retirement choices.

2. The Mortality Blindspot

The most significant financial risk is overpayment. Without robust international mortality screening, schemes can continue paying benefits for years after a member has passed away overseas. Reclaiming these funds from foreign jurisdictions is legally complex and often impossible.

3. Member Welfare & Social Responsibility

Small pots represent a member's future livelihood. When schemes lose touch, they lose the ability to provide value. For the mobile workforce, being "out of touch" means being "under-saved."

Closing the Gap: Next-Generation Data Restoration

To address these complexities, the industry is moving toward AI-enabled web intelligence that looks beyond standard registry searches. Heka’s approach focuses on three core pillars to restore scheme integrity:

1. Global Web Intelligence: By scanning over 3,000 data sources across the open-source web, schemes can locate members deemed "untraceable" by standard legacy providers. This includes identifying active digital footprints such as verified mobiles, professional profiles, and even local news stories to verify identity and marital status.
2. Dynamic Mortality & Life Status: AI can detect "unreported" life events by identifying signals like online obituaries or funeral recordings globally. This allows for real-time mortality updates even in jurisdictions where official death registries are slow or inaccessible.
3. Next-of-Kin & Relationship Mapping: Modern family structures are complex. Data enrichment can now identify spouses, children, and next-of-kin through relational mapping, ensuring that death benefits reach the correct beneficiaries and helping to re-establish contact with the primary member.

Conclusion

As the UK workforce becomes more international, the risk of "lost" members is no longer a fringe issue – it is a core governance challenge. Trustees who bridge the global data gap today will protect their members’ welfare and their scheme’s long-term financial health.

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The digital trust ecosystem has reached a breaking point. For the last decade, the industry’s defense strategy was built on a simple premise: detecting anomalies in a sea of legitimate behavior. But as we enter 2026, the mechanics of fraud have fundamentally inverted.

With global scam losses crossing $1 trillion and deepfake attacks surging by 3,000%, the line between the authentic and the synthetic has been erased. We are now witnessing the birth of "autonomous fraud" – a landscape where barriers to entry have vanished, and the guardrails are gone.

At Heka, we believe we have reached a critical pivot point. The industry must move beyond the futile arms race of trying to outpace generative models by simply using AI to detect AI. The new objective for heads of fraud and risk leaders is not just detecting attacks; it is verifying life.

Here is how the landscape is shifting in 2026, and why "context" is the only defense left that scales.

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The Industrialization of Deception

The most dangerous shift in 2026 is the democratization of high-end attack vectors. What was once the domain of sophisticated syndicates is now accessible to anyone with an internet connection.

This "Fraud as a Service" economy has lowered barriers to entry so drastically that 34% of consumers now report seeing offers to participate in fraud online – an alarmingly steep 89% year-over-year increase.

But the true threat lies in automation. We are witnessing the rise of the "Industrial Smishing Complex." According to insights from the Secret Service, we are seeing SIM farms capable of sending 30 million messages per minute – enough to text every American in under 12 minutes.

This is not just spam; it is a volume game powered by AI agents that never sleep. In the "Pig Butchering 2.0" model, automated scam centers are replacing human labor with AI systems that handle the "hook and line" conversations entirely autonomously. When a single bad actor can launch millions of attacks from a one-bedroom apartment, volume becomes a weapon that overwhelms traditional defenses.

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The Rise of the "Shapeshifter" and "Dust" Attacks

Traditional fraud prevention relies on identifying outliers – high-value transactions or unusual behaviors. In 2026, fraudsters have inverted this logic using two distinct strategies:

1. The Shapeshifting Agent 

Static rules fail against dynamic adversaries. We are now facing "shapeshifting" AI agents that do not follow pre-defined malware scripts. Instead, these agents learn from friction in real-time. If a transaction is declined, the AI adjusts its tactics instantly, using the rejection data to "shapeshift" into a new attack vector. As noted by risk experts, these agents autonomously navigate trial-and-error loops, rendering static rules useless.

2. "Dust" Trails and Horizontal Attacks

While banks watch for the "big heist," fraud rings are executing "horizontal attacks." By skimming small amounts – often around $50 – from thousands of victims simultaneously, attackers create "dust trails" that stay below the investigation thresholds of major institutions.

Data from Sardine.AI indicates that fraud rings are now using fully autonomous systems to execute these attacks across hundreds of merchants simultaneously. Viewed in isolation, a single $50 charge looks like a normal transaction. It is only when viewed through the lens of web intelligence –seeing the shared infrastructure across the wider web – that the attack becomes visible.

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The "Back to Branch" Regression

Perhaps the most alarming trend in 2026 is the erosion of confidence in digital channels. Because AI-generated identities and deepfakes have reached such sophistication, 75% of financial institutions admit their verification technology now produces inconsistent results.

This failure has triggered a defensive regression: the return to physical branches. Gartner estimates that 30% of enterprises no longer trust biometrics alone, leading some banks to demand customers appear in person for identity proofing.

While this stops the immediate bleeding, it is a strategic failure. Forcing customers back to the branch introduces massive friction without solving the core problem. As industry experts note, if a teller reviews a driver's license "as if it's 1995" while facing a fraudster with perfect AI-generated documentation, we are merely adding inconvenience, not security.

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The Solution: Context is the New Identity

The issue facing our industry is not a failure of digital identity itself; it is a failure of context.

Trust is fragile when it relies on a single signal, like a document scan or a selfie. In an AI-versus-AI world, seeing is no longer believing. However, while AI can fabricate a driver's license or a video feed, it consistently fails to recreate the messy, organic digital footprint of a real human being.

To survive the 2026 threat landscape, organizations must pivot toward:

1. Web Intelligence: Linking signals together to see the wider web of interactions rather than isolated events.

2. Long-Term, Consistent Presence: analyzing the continuity of an identity over time. Real humans have history. Synthetic identities, no matter how polished, lack the depth of a long-term digital existence.

3. Cross-Channel Consistency: Looking for the shared infrastructure and overlapping identities that horizontal attacks inevitably leave behind.

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The 2026 Takeaway

The future offers a clear path forward. Fraud prevention is no longer about beating a single control – it is about bridging the gaps between them.

While identity and behavior are easier to fake in isolation, the real advantage lies in the complexity of real-world signals. These are the signals that remain expensive to manufacture at scale. Organizations that embrace this context-driven approach will do more than just stop the $1 trillion wave of autonomous fraud; they will unlock a seamless experience where trust is automatic.

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Stay informed. Stay adaptive. Stay ahead.

At Heka Global, our platform delivers real-time, explainable intelligence from thousands of global data sources to help fraud teams spot non-human patterns, identity inconsistencies, and early lifecycle divergence long before losses occur.

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2025 marked a turning point in digital identity risk. Fraud didn’t simply become more sophisticated – it became industrialized. What emerged across financial institutions was not a new fraud “type,” but a new production model: fraud operations shifted from human-led tactics to system-led pipelines capable of assembling identities, navigating onboarding flows, and adapting to defenses at machine speed.

Synthetic identities, account takeover attempts, and document fraud didn’t just rise in volume; they became more operationally consistent, more repeatable, and more automated. Fraud rings began functioning less like informal criminal networks and more like tech companies: deploying AI agents, modular tooling, continuous integration pipelines, and automated QA-style probing of institutional controls.

This is why so many identity controls failed in 2025. They were calibrated for adversaries who behave like people. 

Automation Became the Default Operating Mode

The most consequential development of 2025 was the normalization of autonomous or semi-autonomous fraud workflows. AI agents began executing tasks traditionally requiring human coordination: assembling identity components, navigating onboarding flows, probing rule thresholds, and iterating on failures in real time. Anthropic’s September findings – documenting agentic AI gaining access to confirmed high-value targets – validated what fraud teams were already observing: the attacker is no longer just an individual actor but a persistent, adaptive system.

According to Visa, activity across their ecosystem shows clear evidence of an AI shift. Mentions of “AI Agent” in underground forums have surged 477%, reflecting how quickly fraudsters are adopting autonomous systems for social engineering, data harvesting, and payment workflows.

Operational consequences were immediate:

• Attempt volumes exceeded human-constrained detection models
• Timing patterns became too consistent for human-based anomaly rules
• Retries and adjustments became systematic rather than opportunistic
• Session structures behaved more like software than people
• Attacks ran continuously, unaffected by time zones, fatigue, or manual bottlenecks

Controls calibrated for human irregularity struggled against machine-level consistency. The threat model had shifted, but the control model had not.

Synthetic Identity Production Reached Industrial Scale

2025 also saw the industrialization of synthetic identity creation – driven by both generative AI and the rapid expansion of fraud-as-a-service (FaaS) marketplaces. What previously required technical skill or bespoke manual work is now fully productized. Criminal marketplaces provide identity components, pre-validated templates, and automated tooling that mirror legitimate SaaS workflows.

These marketplaces supply:

• AI-generated facial images and liveness-passing videos
• Country-specific forged document packs
• Pre-scraped digital footprints from public and commercial sources
• Bulk synthetic identity templates with coherent PII
• Automated onboarding scripts designed to work across popular IDV vendors
• APIs capable of generating thousands of synthetic profiles at once
• And more…

This ecosystem eliminated traditional constraints on identity fabrication. In North America, synthetic document fraud rose 311% year-on-year. Globally, deepfake incidents surged 700%. And with access to consumer data platforms like BeenVerified, fraud actors needed little more than a name to construct a plausible identity footprint.

The critical challenge was not just volume, but coherence: synthetic identities were often too clean, too consistent, and too well-structured. Legacy controls interpret clean data as low risk. But today, the absence of noise is often the strongest indicator of machine-assembled identity.

Because FaaS marketplaces standardized production, institutions began seeing near-identical identity patterns across geographies, platforms, and product types – a hallmark of industrialized fraud. Controls validated what “existed,” not whether it reflected a real human identity. That gap widened every quarter in 2025.

Where Identity Controls Reached Their Limits

As fraud operations industrialized, several foundational identity controls reached structural limits. These were not tactical failures; they reflected the fact that the underlying assumptions behind these controls no longer matched the behavior of modern adversaries.

Device intelligence weakened as attackers shifted to hardware

For years, device fingerprinting was a strong differentiator between legitimate users and automated or high-risk actors. This vulnerability was exposed by Europol’s Operation SIMCARTEL in October 2025, one of many recent cases where criminals used genuine hardware and SIM box technology, specifically 40,000 physical SIM cards, to generate real, high-entropy device signals that bypassed checks. Fraud rings moved from spoofing devices to operating them at scale, eroding the effectiveness of fingerprinting models designed to catch software-based manipulation.

Knowledge-based authentication effectively collapsed

With PII volume at unprecedented levels and AI retrieval tools able to surface answers instantly, knowledge-based authentication no longer correlated with human identity ownership. Breaches like the TransUnion incident in late August 2025, which exposed 4.4 million sensitive records, flood the dark web with PII. These events provide bad actors with the exact answers needed to bypass security questions, and when paired with AI retrieval tools, render KBA controls defenseless. What was once a fallback escalated into a near-zero-value signal.

Rules were systematically reverse-engineered

High-volume, automated adversarial probing enabled fraud actors to map rule thresholds with precision. UK Finance and Cifas jointly reported 26,000 ATO attempts engineered to stay just under the £500 review limit. Rules didn’t fail because they were poorly designed. They failed because automation made them predictable.

Lifecycle gaps remained unprotected

Most controls still anchor identity validation to isolated events – onboarding, large transactions, or high-friction workflows. Fraud operations exploited the unmonitored spaces in between:

• contact detail changes
• dormant account reactivation
• incremental credential resets
• low-value testing

Legacy controls were built for linear journeys. Fraud in 2025 moved laterally.

What 2026 Fraud Strategy Now Requires

The institutions that performed best in 2025 were not the ones with the most tools – they were the ones that recalibrated how identity is evaluated and how fraud is expected to behave. The shift was operational, not philosophical: identity is no longer an event to verify, but a system to monitor continuously.

Three strategic adjustments separated resilient teams from those that saw the highest loss spikes.

1. Treat identity as a longitudinal signal, not a point-in-time check

Onboarding signals are now the weakest indicators of identity integrity. Fraud prevention improved when teams shifted focus to:

• behavioral drift over time
• sequence patterns across user journeys
• changes in device, channel, or footprint lineage
• reactivation profiles on dormant accounts
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Continuous identity monitoring is replacing traditional KYC cadence. The strongest institutions treated identity as something that must prove itself repeatedly, not once.

2. Incorporate external and open-web intelligence into identity decisions

Industrialized fraud exploits the gaps left by internal-only models. High-performing institutions widened their aperture and integrated signals from:

• digital footprint depth and entropy
• cross-platform identity reuse
• domain/phone/email lineage
• web presence maturity
• global device networks and associations

These signals exposed synthetics that passed internal checks flawlessly but could not replicate authentic, long-term human activity on the open web.

Identity integrity is now a multi-environment assessment, not an internal verification process.

3. Detect automation explicitly

Most fraud in 2025 exhibited machine-level regularity – predictable timing, optimized retries, stable sequences. Teams that succeeded treated automation as a primary signal, incorporating:

• micro-timing analysis
• session-structure profiling
• velocity and retry pattern detection
• non-human cadence modeling

Fraud no longer “looks suspicious”; it behaves systematically. Detection must reflect that.

4. Shift from tool stacks to orchestration

Fragmented fraud stacks produced fragmented intelligence. Institutions saw the strongest improvements when they unified:

• IDV
• behavioral analytics
• device and network intelligence
• OSINT and digital footprint context
• transaction and account-change data

into a single, coherent decision layer. Data orchestration provided two outcomes legacy stacks could not:

1. Contextual scoring – identities evaluated across signals, not in isolation
2. Consistent policy application – reducing false positives and operational drag

The shift isn’t toward more controls; it is toward coordination.

Closing Perspective

Identity controls didn’t fail in 2025 because institutions lacked capability. They failed because the models underpinning those controls were anchored to a world where identity was stable, fraud was manual, and behavioral irregularity differentiated good actors from bad.

In 2025, identity became dynamic and distributed. Fraud became industrialized and system-led.

Institutions that recalibrate their approach now – treating identity as a living system, integrating external context, and unifying decisioning layers – will be best positioned to defend against the operational realities of 2026.

At Heka Global, our platform delivers real-time, explainable intelligence from thousands of global data sources to help fraud teams spot non-human patterns, identity inconsistencies, and early lifecycle divergence long before losses occur.

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