Plasticized fraud

by Paul White

For the digital consumer, identity theft is a growing threat that can have devastating consequences - financially, on trust and reputation. Fraud is on the rise. One of the challenges for individuals and organisations, is the difficulty in tackling this menace as criminals become more sophisticated. At the heart of the complexity is the age old menace of plastic. 

Plastic and paper still dominate how we represent and exchange tokens of trust – the licenses, the passports and so on. But plastic is vulnerable to adept counterfeiters, it is normally shipped by mail, easily misplaced and stolen.

According to www.ukfinance.org.uk, the most recent statistics show there are 175.7 million credit and debit cards in circulation. That’s enough plastic to stretch halfway round our planet (the ecological benefit of digital identity is a topic in itself)

At the same time, the impact of identity fraud in recent years has increased markedly. Figures from Javelin Strategy, show that in 2018 there has been a surge of high-loss fraud. In the US alone, there were a jaw-dropping 14.4 million victims from new account fraud, account takeover or misuse of non-card accounts. That’s roughly 27 fraud cases every second.

The most vulnerable victims are increasingly targeted, the young, the old, the social media extraverts.  The most popular products are student loans, mortgages, new company registration and auto loans.  We all know the burden of preparing old forms of ID, and many of us can see the gaps and loopholes… the fraudsters certainly can.

Is it time we turn the plastic production line off completely?  Could the world survive, even thrive, with a completely digital system? Could identity registration, issuance and authentication of digitally secured credentials be a key to tackling identity fraud?

In an era still dominated by old (not necessarily bad, just outdated) habits, we might be nearing a turning point.  Technology marches on, but the methods we use to transact, make purchases, access local government services and so on, are still hard-wired in the last century. The problems are systemic and so a more visionary approach is required.

Making good digital identity work is the next challenge, not that we would ever shoot for anything less than ‘good’.  With good digital identity, we can look forward to validation that is supported by sophisticated biometrics and machine learning.   Human error, unconscious bias, tiredness or distraction wont impact results. We have changed, the volume and variation of services we interact with doesn’t work with plastic, you cant remember enough codewords or receive enough one time passwords.

Imagine the only place we could remind ourselves of the former pervasiveness of username and passwords is a display of rubbish things from the era. 1972-2020 in a tech museum? Yes, one day we will see the abolition of these for good.

People will use their smart devices with wildly accurate and consistent biometric identification to access services and content everywhere.

Advanced biometrics are already changing lives and transforming processes.  Verification by selfies, even moving selfies, can process hundreds of points on a face and compare with certificated images in milliseconds. 

According to Gartner research, 70 percent of organizations are expected to be using smartphone apps to allow biometric authentication for employees access into buildings. Clearly the benefits in diverse scenarios, such as workplace access or shopping, include greater certainty in identifying an individual and quicker access.

While the technology starts to be adopted into mainstream usage, there are things individuals can do to protect themselves from ID fraud, such as manage their passwords sensibly and limit information sharing on social media.

Perhaps basic advice, but so often ignored?

Fraudsters are finding easy targets in all sectors, mobile network operators for instance, can make life easier for fraudsters as they rely on outdated authentication methods beyond passwords such as security questions, or SMS one-time pass codes.  It is increasingly evident that these pose little barrier to determined criminals who can as easily intercept an SMS text as they can a password. 

Let’s think big, to good – no ‘Super’ identity where the smart device a user holds is all they need to be 100% verifiable, quickly and confidently.

The consequences of identity fraud can be devastating for the individual victims. The good news is even as criminals become more sophisticated, the technology is there to combat these threats. We are about to be swept on a wave of digital-first, mobile-first identify transformation. Combined with more awareness and behavioural change,  we will protect ourselves and tackle this growing menace.

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