industry news SME profile Sunday 11 Sep 2022 @ 09:54 The importance of fraud prevention during the cost of living crisis
Latest Article By Barley Laing, the UK Managing Director at Melissa
The big jump in inflation has created a cost of living crisis. Combine this with an increase in digitalisation of services and remote working at a time of great volatility in the world, and you create new motives and justification for fraud to flourish. In fact, the current turmoil has fed into the three elements of the fraud triangle: motivation, opportunity and rationalisation.
At the same time fraud and error in public spending are estimated to cost the UK taxpayer up to £51.8 billion every year – a figure that’s set to grow. These losses are occurring when departmental budgets are already under huge pressure due to the considerable sum the government has borrowed to support the country during the pandemic. With the purse strings being loosened again, while taxes are cut to encourage growth during the cost of living crisis, expect the UK’s debt to increase while the government pushes for more savings from the civil service.
With a surge in fraud anticipated, it’s more important than ever that those in the public sector ensure they are dealing with the person they think they are online.
Clean data supports ID verification
Before utilising ID verification tools a good first step to help prevent fraud is to have processes in place that deliver ongoing data hygiene.
For instance, when it comes to the data cleansing process, one of the most useful tools for the public sector is an address autocomplete or lookup service which gathers accurate address data in real-time at the onboarding stage. These tools also provide address validation - supporting ID verification.
Since ID checks will pick up basic issues with data, such as an incorrectly formatted address, it’s better value and best practice to ensure you have accurate user contact data in the first place.
There are other benefits with a data hygiene first approach, which are not only important for identity verification. Accurate data on users enables organisations to obtain valuable insight, such as a single citizen view (SCV). This insight can be used to improve services and targeting, including personalisation with communications, which enhances the user experience.
With evolving technology it’s even more straightforward for the public sector to deliver data quality. Today you can pay for a license to access a data cleaning platform that requires no code, integration or training - simply plug in and benefit, immediately.
Embrace electronic ID verification (eIDV)
Preventing fraud can’t be achieved by data hygiene practices on their own. Forward thinking public sector organisations are already using identity verification services, such as eIDV. These tools deliver cross-checks against an individual's contact data – name, address, phone and email address - in real-time, as they complete an online application process, whilst ensuring the user experience isn’t compromised. To operate effectively the eIDV service must have access to a dataset of billions of global consumer records, including reputable third party, sanctions, and politically exposed person (PEP) data, from government agency, credit agency, and utility companies. The service should enrich the data of those held on databases, highlighting and correcting any existing inaccuracies. This approach also ensures good governance by aiding compliance with know your citizen (KYC) and anti-money laundering (AML) regulations.
This move to digital makes it essential that public bodies embrace automated eIDV in lieu of the manual ID checks that many still undertake, despite the fact they are more expensive, time consuming and subject to human error.
To further prevent fraud biometrics plays an important part of the strategic eIDV process. A biometric technology that delivers facial and document verification using optical character recognition (OCR) works well. It can check the validity of ID documentation in real-time and effectively examines the image in the master ID documents with the selfie provided by the applicant or user to see if they match. Once an applicant passes the necessary checks and is verified using this technology it simplifies the process of accessing their account or services. This approach doesn’t require time-consuming security questions and passwords, users simply provide a selfie. However, the OCR technology used must be able to offer liveness checks, and request a ‘challenge response’, such as blinking. This way it’s possible to establish that the person is real and not a potential fraudster.
With the cost of living crisis starting to bite, now is the time for those in the public sector, if they have not done so already, to protect their valuable budgets from fraudsters. While a good first step is having processes in place that deliver data hygiene, to be as secure as possible necessitates eIDV and biometric tools in place.
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