In today’s landscape of escalating online fraud, having robust and efficient authentication methods is no longer optional; it’s critical. This is especially true in the fintech and microcredit sectors, where scams can result in direct financial losses, reputational damage, regulatory fines and penalties, as well as costly litigation.
Identity theft has become a highly sophisticated threat. Through this type of fraud, criminals illegally obtain personally identifiable information from customers or users, which they then use to access bank accounts or other financial services. To achieve this, fraudsters employ multiple tactics, including phishing and other social engineering attacks, SIM swapping, and data breaches. They also rely on synthetic identity fraud—creating a false identity by combining real personal data with fabricated information—something increasingly enabled by artificial intelligence.
This means that a fraudster could use another person’s identity to apply for a loan or other financial products and then divert the funds for themselves. Microfinance institutions with weak identity verification procedures are particularly vulnerable to these types of attacks.
Concerning Figures
Why is identity theft so alarming? Because it endangers both financial institutions and their customers across multiple channels.
In 2023, the FTC reported that imposter scams ranked second in terms of total losses reported by U.S. consumers, reaching nearly USD 2.7 billion. This type of fraud was also the most reported, with a sharp rise in identity impersonation cases involving both businesses and government entities.
Meanwhile, in 2024, identity fraud surged by 137% in Latin America and the Caribbean, according to Sumsub’s Global Fraud Index. Analysts attributed this trend to “the proliferation of deepfakes and the widespread use of social media, which facilitate the manipulation of personal data and identity impersonation.”
Why mobile ID APIs play a key role
To address this issue, fintech and microcredit companies can no longer rely solely on traditional verification methods. They need to adopt a multi-layered approach that includes continuous and dynamic monitoring, encryption, enhanced authentication mechanisms, streamlined onboarding processes, customer education, and more—all while ensuring a frictionless customer experience.
Mobile ID APIs can help companies leverage telecom networks to authenticate users, verify transactions, and deliver real-time notifications. By partnering with mobile operators and Mobile ID API integrators, fintech and microcredit providers gain access to secure and reliable tools for account protection and fraud prevention.
Mobile ID APIs make it possible to:
• Strengthen Know Your Customer (KYC) processes.
• Verify devices to ensure that data originates from legitimate sources.
• Detect potential SIM swap fraud attempts.
In doing so, these APIs add an extra layer of protection for users conducting transactions on fintech or microcredit platforms, ensuring that only authorized individuals can access their accounts. They also enable “silent” authentication (running in the background without customer intervention), offering greater convenience while eliminating the risk of user error.
Plusmo’s role in this landscape
Plusmo acts as an aggregator, offering a complete suite of APIs for identity protection. Its platform enhances the security of transactions carried out across fintech and microcredit ecosystems, helping institutions safeguard both their operations and their customers.
