Fighting fraud in a digital world
Now more than ever, the need to fight fraud and improved data security within financial services and banking institutions have taken centre stage. Customers, both corporate and personal, need greater digital functionality. Covid-19 continues to cement the new normal and drive digital trends such as access to a wider variety of online banking services to the foreground.
PwC’s recent survey indicates that $42 Billion (R599 Billion) was lost to economic fraud/criminal activities over the past 24 months. The survey also reveals that the top four types of fraud are, customer fraud, cybercrime, asset misappropriation and bribery and corruption.
Some institutions within South Africa’s financial sector have embraced the benefits that come with technologies like facial verification software. However, it is up to the banks to continue to safeguard their clientele regardless of whether they are an ‘average-Joe’ on the street, or a multinational corporation.
Incidents of fraud are still widely reported
Locally, the FICA (Financial Intelligence Centre Act) has been a part of the South African commerce landscape since July 2003, but incidents of economic crime and fraud are still widely reported. The South African Fraud Prevention Service (SAFPS) indicated that there have been major increases in incidents of identity fraud with impersonations up by 337%.
If we empower our banks to help them discern who the legitimate clients are through KYC (know your customer) tools and policies in addition to FICA legislation, a significant amount of risk can be mitigated let alone the amount of money that can be saved.
Biometric security is a necessary norm for financial institutions and retail businesses that offer any type of financial services (store accounts/cards/loans and e-commerce facilities). The current safeguards like passwords and OTPs used to bolster security is simply just not good enough anymore. People forget PINs, lose cards, and get account numbers confused. No matter if your client is a person or a business, an individual is always at the centre of any service and their needs have to be met.
It is no secret that Millennials have poor password hygiene, and more than half are likely to reuse passwords or work devices for personal activities. Good or bad, data breaches are bound to happen, and the best approach is to ensure a simple solution that can be deployed on a massive scale that works for the person on the other end of the phone/laptop and the bank/financial institution in question.
The need for biometric security to fight fraud
Businesses and banks need to realise that deploying biometric security features across their digital facilities and apps is a must, not a maybe. It is not an overly tedious process and banks need to seriously consider and evaluate their tech infrastructure to determine how they wish to invest into their long-term biometric security strategy to compete not only on a local stage, but an international one too.
In most instances, the onboarding of new clients does represent a critical phase for banks and other financial service institutions as they have to authenticate the identity of this person/company who wishes to use their services. These businesses also need to ensure the continued security of their existing clients as well. There is potential for a knock-on effect if one channel proves to be the weak link in a chain.
If one bank can showcase effective security measures that embrace the efficacy and ease of biometric security, like facial verification, then I believe they would have a competitive advantage in a world that pivots cybersecurity as one of the catalysts to day-to-day digital adoption.
Facial Recognition vs Biometric Authentication, find out more.