industry news SME profile Sunday 08 Aug 2021 @ 11:23 How public bodies can prevent fraud in push to digitalisation
How public bodies can prevent fraud in push to digitalisation
Article by Barley Laing, the UK Managing Director at Melissa
The budget deficit has rocketed during the pandemic, with the Office for National Statistics (ONS) highlighting that borrowing reached £270.6 billion in 2020, up by £222 billion on 2019. Meanwhile, tax receipts have experienced a sharp drop with a 9.8 per cent contraction in the UK economy in 2020. This will continue to put a squeeze on budgets for public bodies for many years to come.
At the same time, the pandemic is supercharging the move to online. Greater interaction in the digital space has led to increased opportunities for fraudulent activity, particularly around applications for the Government’s Bounce Back Loan Scheme. Parliament’s Public Accounts Committee (PAC) estimates fraud and error from this Loan Scheme could cost the British taxpayer up to £27 billion, on top of some £50 billion a year lost to criminals and mistakes.
Therefore, it’s essential that the public sector undertakes ID verification when engaging with individuals online to protect precious budgets. However, to ensure users have the good experience they expect online, it must be a fast, secure yet accurate process.
Time to embrace electronic identity verification (eIDV)
To prevent fraud it’s important that those in the public sector embrace electronic identity verification (eIDV). When someone goes through the online application process for a service such a tool can run cross-checks against the data they have provided in real time. This means matching someone’s name, address, date of birth, email or phone number against reputable data streams, like utility, credit and government agency records. As part of this process those in the public sector also need politically exposed person (PEP) data for know your customer (KYC) and anti-money laundering (AML) checks. However, to do this effectively they need access to billions of global records in real time to ensure the customer experience isn’t compromised.
This approach is far better than the other option, which is physical, time consuming and much more costly checks that traditionally take place behind the scenes – checks that are subject to human error. This technology can also fill in the gaps where contact data is missing and correct inaccurate addresses, emails and phone numbers.
The good news is eIDV capabilities are delivered through apps, SaaS, and web APIs, and are therefore simple to integrate into existing online platforms. They can also easily be scaled up, delivering as little as 100 checks per year, through to many millions, if required.
Combine document verification with biometrics
To further prevent fraud it’s important to combine document verification technologies such as machine readable zone (MRZ) and optical character recognition (ORC), with biometrics in a strategic eIDV process. Document verification is vital in the ‘remote onboarding’ of online users. It enables public bodies to verify ID documentation and identify the user with confidence as they send their ID through, in real time, via the device of their choice.
Using the photos embedded in the ID from the document verification process biometrics can take place. Biometrics adds value by enabling public bodies to digitally identify a person, accurately, by comparing the picture in the verified ID with the image the user has provided to access their account, in real time. This makes it possible for people to quickly and easily access services or their account without the need to answer time consuming security questions, or remember passwords, helping to ensure a positive experience.
However, basic biometrics can be hackable, which is why it’s important to use a biometric algorithm that checks for eye movement. This ensures organisations are engaging with a real live person, not a static image or avatar to further help to prevent fraud.
Artificial intelligence (AI) is set to play a role
AI can work well with eIDV. In particular, semantic technology, which is a form of AI that associates words with meanings and recognises the relationship between them. The machine reasoning and automated pattern recognition provided by this technology helps to identify possible fraudulent applications in real time. Also, semantic technology makes it possible to apply context and make inferences with data, ensuring properly validated identities as well as broader data quality and integrity.
With interactions increasingly online, combined with the growth in fraud, and the pandemic putting pressure on very tight public sector budgets, it’s critical steps are put in place to undertake ID verification to prevent fraud. It’s very cost effective and straightforward to integrate tools such as eIDV, document verification, biometrics and increasingly AI, that will help public bodies to avoid fraud, improve the user experience and protect budgets.
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