Plaid Updates Identity Verification to Combat GenAI Fraud

Plaid has updated its identity verification (IDV) product to counter the threat posed by fraudsters who use generative artificial intelligence.

New features added to the product include deepfake and synthetic media detection, facial duplicate detection to catch repeat fraud attempts, age estimation to flag impersonation risks, and risk-based flows that adapt in real time to streamline trusted users and escalate high-risk ones, the company said in a Tuesday (May 13) blog post.

The upgrades are now available to all Plaid IDV customers, with no extra integration required, according to the post.

“New generative AI models now pop up almost every week, and even unsophisticated fraudsters use them to generate convincing ID verification sessions at scale,” Plaid Product Marketing Manager Danica Kleint and Product Manager Anthony Sezer wrote in the post. “That shift makes defense-in-depth — layering several independent checks so nothing hinges on a single point of failure — more crucial than ever.”

Artificial intelligence has helped make fraud more sophisticated, PYMNTS reported in April. With AI tools, fraudsters can produce deepfake videos or voice, more convincing phishing emails and fake images like a driver’s license.

The technology is also being used to combat fraud. Generative AI excels at detecting subtle and novel fraud patterns in unstructured data, significantly enhancing fraud detection capabilities, according to the PYMNTS Intelligence report, “Can Generative AI Break the Payments Fraud Cycle?”

The report found that 83% of financial institutions are eyeing the use of generative AI to fight fraud.

It was reported in January that use of Plaid’s identity verification product jumped more than 400% in 2024.

In April, Plaid said it raised $575 million in new funding following a year in which it made a “meaningful expansion” to its product suite.

“Plaid has evolved from a business solely focused on bank linking, into a suite of data analytics products that are essential to financial services and adjacent markets,” Plaid Co-founder and CEO Zach Perrett wrote in an April 3 blog post. “Whether it’s signing up new users, fighting fraud, enabling bank payments, or making underwriting decisions, our network is core to the way that our customers run their businesses and consumers run their financial lives.”