How to leverage technology to fight against fraud as the Government’s ‘Stop! Think Fraud’ campaign launches
By Barley Laing, the UK Managing Director at Melissa
Fraud is a huge and growing problem, with it accounting for around 40 per cent of all crime in England and Wales, with an estimated 3.5 million offences last year according to the Office of National Statistics.
While it is great to see the launch of the Government’s ‘Stop! Think Fraud’ campaign which is educating consumers on how to look out for and avoid fraud, what should organisations be doing to prevent fraud, and what role can technology play in this process? This is important with fraud costing British businesses an estimated £158 billion in 2021.
Technology is leading the way in aiding ID verification and countering the threat of fraud, as well as helping businesses to adhere to know your customer (KYC), know your business (KYB) and anti-money laundering (AML) regulations.
Use an eIDV tool
Technology has come of age with electronic identity verification (eIDV) platforms leading the way. These tools can be accessed via a variety of delivery mechanisms, including cloud API (application programming interface) and SaaS (software-as-a-service), and scaled up or down according to the users’ needs.
Due to these platforms being “always on” they can, in real-time, cross-check the names, addresses, email addresses and phone numbers provided by applicants during remote onboarding. This provides a good experience for the end user, while preventing fraud. For the best results, it’s recommended to source an eIDV tool with access to billions of consumer and business records from reputable sources around the world, such as government, utility and credit agencies.
When compared to manual ID checks, using such a platform is significantly quicker, more accurate and cost effective for undertaking ID verification and preventing fraud. This technology requires no additional staffing or training costs, and there is far less risk of human error.
Access data cleaning technology
It is always advisable to have clean and up-to-date customer data. This makes using technology that delivers data hygiene, such as an address lookup or autocomplete service, which gathers accurate address data in real-time at the onboarding stage, vital. These tools support ID verification, by delivering address verification. Additionally, data quality and cleaning services that pick up any inaccuracies in customer contact data are paramount in reducing the possibility of fraud from poor quality or inaccurate data.
Think KYB
The eIDV verification platform sourced should also offer global data on know your business (KYB).
By understanding the risks posed by new and existing business users and suppliers it’s possible to prevent fraud from taking place. KYB checks are crucial because fraud is frequently committed by shell companies or organisational structures that aren’t real. Additionally, KYB screening hinders crimes, such as money laundering and terror financing, which can cause significant reputational damage.
Go further to prevent fraud
The technology chosen should also be capable of providing sanctions / watchlist, politically exposed persons (PEPs) and relatives and close associates (RCAs) screening, along with adverse media checks. The result is a full service ID verification offering – one that offers economies of scale, and global coverage should that be required.
Sanctions data
Access to an up-to-date sanctions list is essential to ensure that you are up to speed with the latest sanctions data and regulations. Additionally, using such a list is a legal requirement. It’s preferable to use an automated eIDV platform that collects and synthesises sanctions data from trusted sources from around the world, and is able to continually scan for updates on sanctions data and deliver them daily, in real-time. This automated approach is a much more efficient and accurate way to undertake sanctions screening.
Don’t forget PEPs and RCAs
It is vital to obtain PEP and RCA data for a broader best practice approach to sanctions screening, to protect your organisation against potential fraud and avoid having users who can damage your reputation. PEPs and RCAs are more likely to be involved with or drawn into crime because of the nature of their roles or relationships with those in positions of power. Identifying who these people are is important, because if they abuse their position to defraud your organisation, not only will there be monetary costs, but the situation could cause considerable reputational damage.
Adverse media checks
Adverse media checks are a critical part of best practice customer due diligence (CDD) and AML processes. By using the automated technology that powers it organisations are able to keep up to date on the latest worldwide news and alerts in real-time on any arrests, court cases or convictions against users of their services. These may be PEPs and RCAs, along with others who might have possible negative regulatory, financial or reputational consequences to their organisation.
To obtain the most accurate risk profiles of those using your services scanning for negative news on an individual or business, even if they do not appear on any international watchlists, is vital. It also supports best-practice due diligence for KYC, KYB, and AML.
In summary
With consumers being encouraged by the Government to do their bit to protect themselves from becoming victims of fraud, organisations should be doing the same. This means sourcing technology to deliver seamless, real-time ID checks via a full service eIDV platform with a global reach. It’s the answer to prevent fraud and provide a smooth onboarding experience. The alternative—implementing costly manual checks using fragmented datasets from numerous of different sources lacking worldwide coverage—is no longer fit for purpose to stop the growing problem of fraud.
Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.