India, Dec. 9 -- The biggest potential threat to global financial institutions is not identity theft anymore; it is identity fabrication.

Financial institutions worldwide are grappling with losses estimated in the tens of billions, approximately USD 35 billion in 2023 alone, according to FiVerty, an anti-fraud collaboration platform. These losses are no longer limited to one-off fraud attempts but are driven by a hyper-realistic, AI-coordinated threat known as the Synthetic Identity Fabric (SIF).

It is not a simple digital equivalent to a fake identity; it is the automated creation of an entire, plausible criminal ecosystem designed to live in the shadows of the legitimate financial system.

Traditionally, fraud involved stealing an exi...