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Fraudsters do not discriminate. As we continuously move towards the adoption of a digital and more importantly ‘touchless’ era, the platform for fraud increases. Fraud is a fraudster’s business and they often use the same business tactics we use in legitimate business, the difference being that they don’t have customers, they have victims. Thanks to an increase in data breaches, fraudsters are motivated and armed with the correct information, meaning that are very capable of impersonating an individual. The impacts of this are catastrophic.

This was the warning sounded by Dalene Deale, Executive Head of Secure Citizen at the recently held SAFPS Fraud Summit. Having been a victim of identity theft herself, she knows the impact it can have on a person and the importance behind creating an environment that fights against the growing nature of this challenge.

It is not all ‘doom and gloom’ though, technology and innovation is not the enemy. Technology can be used to ensure that digital inclusivity is possible through innovation and collaboration

Responding to a challenge

Secure Citizen was created through a collaboration with the Southern African Fraud Prevention Service (SAFPS) and OneVault in response to a rapid growth in identity theft following online fraud.

“The objective of Secure Citizen is to focus on a key core functionality that enables both businesses and individuals to interact in a trusted, delightful and easy manner. In South Africa we are fortunate to have an established Identity System governed by the Department of Home Affairs, but many individuals do not participate in the digital economy due to the high levels of fraud or due to a lack of understanding/knowledge. Our Secure Citizen aim is to drive digital inclusivity, which underpins and enable financial inclusion,” says Manie van Schalkwyk, CEO of the SAFPS.

“From a consumer perspective, a digital identity solution must be based an individual’s unique attributes, it must be easy to use, real time and it has to enable trust. The solution must not discriminate against income, gender, geographical location, or even your choice in mobile phone. For companies, the solution must be interoperable; it cannot discriminate against legacy or future systems, or the maturity of a company’s digital transformation journey. It must be affordable; available to any business regardless of size, whether your business is classified as SMME or Enterprise. Every business in our country has to be able to verify the identity of their existing and potential customers, employees and even directors of their partners,” says Deale.

Reducing cost

One of the major challenges when it comes to combatting fraud is, besides the fact that fraudsters are increasingly motivated and have relatively easy access to personal information, the cost of protecting yourself against impersonation fraud can get expensive as it is a crime that targets a single person on a continued basis.

Through verifications based on the DHA database, the SAFPS was able to save South African companies some R4.4B – an 86% increase year-on-year in 2020.

“The question remains, how much of this is due to the supply and demand rule and the cost of the technology required to meet the required compliance. The flip side to this is that it is not just a compliance exercise, but it is a requirement to keep consumer information safe while combatting the massive growth in fraud. Both SAFPS and Secure Citizen have highlighted the massive growth in impersonation fraud that increased by 337% Year on Year. Secure Citizen’s philosophy is that combatting fraud should be a joint effort between businesses and individuals and it should be affordable to businesses regardless of their size,” says Deale.

She added that this is why the partnership between Secure Citizen and the SAFPS is key. “Not only is the SAFPS the trusted custodian of fraud prevention in Southern Africa, but they are also a Not-for-Profit organisation. Secure Citizen, as the Digital Identity arm of SAFPS aims to ensure that Fraud is no longer reactive, but proactive on the part of the individual and the businesses that serve them,” says Deale.

Mutual benefit

Fraud is not only committed by fraudsters who target individuals, often, companies become massive targets as well. Statistics show that during times of economic recession, the instances of company fraud increase as people become increasingly desperate.

This is where the benefit of Secure Citizen, from a Know Your Customer (KYC) point of view stands out.

“We have seen instances where information is used to create fake identities and fraudsters then impersonate their victims and take out credit and run up debt. The individual being scammed only finds out when it is too late. It is important to highlight in this scenario, there are two victims, the individual and the business has been scammed. For the individual, trying to get back control of your identity is extremely difficult. You cannot go to Home Affairs and ask for a new identity. This means that individuals are reactive, and it is usually only at this point that they hear about SAFPS for the first time. Unfortunately, we also see new desperate measures being taken by individuals where they use a new smart ID to take out a line of credit, spend it and then come back weeks later and claim it was not them, showing an old ID card. The store staff are left with a conundrum, trying to prove the legitimacy of the application, which unfortunately also highlights that companies are often impacted by losing goods and cash. Trust is being broken on both sides,” says Deale.

Secure Citizen solves both challenges by bridging the gap between businesses and individuals in an interactive process. Our ability to get the person to verify using a selfie which is verified in near real time, means that the face of the individual is verified and married to the transaction in a POPI compliant manner.

“As a consumer, I would want the service providers that I engage with to be a 100% sure whether they are dealing with me when an application is done in my name, using my information. I have had identity theft and it is a terrible experience. If only the person in the store of my telco service provider was able to verify my face in real time, I would not have had two fraudulent upgrades done against my name,” says Deale.

Creating a protective, and proactive future

“As a society, it is important that we move towards creating a world where the fight against fraud becomes protective and proactive. We need to protect consumers and this needs to be done in a proactive manner. We cannot always be reactive when it comes to fraud,” says Van Schalkwyk.

“Secure Citizen will be making this solution available directly to the public to enrol themselves into the Secure Citizen Database at no cost. We believe that using your biometrics is your birth right. Nobody should be able to use your information without your knowledge and without your permission,” says Deale.

Both Van Schalkwyk and Deale added that another benefit to the public is that Secure Citizen makes it possible for them to see which companies have used their data via Secure Citizen’s system. However, these businesses will be able to see how many companies have used the same Secure Citizen persona for verification. This is referred to as triple blindness, that data belongs to the individual, so we do not disclose the information of the companies to anyone other than the individual.

“We are confident that Secure Citizen, in collaboration with the SAFPS, will make meaningful change in the fight against fraud,” concludes Van Schalkwyk.