Synthetic identity fraud is growing as criminals create identities by blending real data (e.g., SSNs) with fabricated or AI-generated details, allowing them to pass traditional verification checks. Generative AI tools make it easier and cheaper to produce convincing identity signals at scale, shifting fraud economics toward attackers. Fraudsters build credibility across multiple institutions over time, exposing the limits of KYC systems that verify individual data points instead of evaluating identities holistically and creating a potential systemwide problem. .