Identity-centric security solutions provider, Entrust, and DocuSign, have released the findings of a joint global study examining the rising costs of identity fraud and the trade-offs enterprises face between security and customer experience.

The Future of Global Identity Verification research report highlights identity fraud as a growing global threat across industries, with 69% of organisations reporting an increase in fraud attempts.

Large enterprises are particularly affected, with organisations employing over 5,000 people facing an average annual direct identity fraud cost of $13 million. For those with over 10,000 employees, 20% experience annual direct and indirect fraud costs exceeding $50 million.

AI-assisted fraud is making attacks more sophisticated and frequent. More than half (51%) of respondents noted that fraud is more common when using usernames and passwords alone compared to any other authentication method, underscoring the vulnerability of basic single-factor authentication.

In contrast, just 21% of organisations reported fraud attempts against facial biometric liveness detection, demonstrating the effectiveness of advanced authentication solutions.

“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, AI-powered deepfake detection run in the background.

“Adaptive authentication completes the identity lifecycle security and further enhances security by adjusting requirements based on risk signals, ensuring protection without unnecessary friction.”

As fraud tactics evolve, organisations are prioritising stronger identity protection, despite concerns about adding friction to the customer experience.

While 58% of respondents worry that stricter fraud controls could frustrate consumers, the majority recognise the benefits of investing in identity verification (IDV) solutions. Seventy percent agree that technology investment is the best way to mitigate the financial risks of identity fraud, and 74% plan to increase their IDV investments in the future.

The financial impact of these investments is significant. Organisations that have implemented IDV solutions report average savings of $8 million.

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Further, high investors in IDV solutions are 2.2 times more likely to see cost savings compared to lower investors, 1.7 times more likely to have significantly reduced identity fraud, 2.7 times more likely to view IDV as a competitive advantage, and 1.6 times more likely to report a positive impact on their brand.

“As identity fraud escalates, enterprises are increasingly pressured to strike the right balance between security and seamless user experiences,” said Mangesh Bhandarkar, Group Vice President 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. By implementing intelligent, low-friction security measures that are part of the Docusign Identify portfolio, businesses can create the right balance between building trust, protecting customers, and driving long-term engagement in an increasingly digital world.”