According to a recent study by credit bureau Compuscan, more than R1 billion is lost every year in South Africa to identity fraud. In addition, the South African Banking Risk Information Centre (SABRIC) estimates that in the first nine months of 2013, the industry losses from credit card fraud amounted to R367 million.
The most worrying aspect about this is that the numbers are continuing to increase year-on-year. Stan Khan, Managing Director of Muvoni Biometrics and Smartcard Solutions (MBSS), believes that increased adoption of biometric technology will bring these numbers down and "help those in the banking industry sleep more soundly".
"The problem with identity fraud is that it is too easy for criminals to commit," he says. "Banks and other credit providers are not protected enough with their current systems of operation and money is swindled every day because of it. With proper biometric infrastructure, banks would be able to identify an individual beyond an easily falsified green ID book," Khan indicated.
Biometrics are anything inherent to an individual and can be used to uniquely identify a person beyond a shadow of a doubt. This can be anything from fingerprints, or the iris in one's eye, to the unique pattern in a person's voice.
"The ability to accurately identify someone is of critical importance. To falsify someone's fingerprint or voice pattern is no mean feat. Biometrics are so sensitive that even the most skilled mimics in the world struggle to fool modern biometric technology. If banks logged biometric details from the beginning of every customer's journey with the bank, fraudsters would have a much harder time breaking the law," says Khan.
Beyond fingerprints, signature authentication is another biometric technology that can stand to serve the South African banking industry well. "Considering most processes at a bank involves a signature, and usually more than one, technology can be used to accurately identify a person through their written signature."
Signature biometrics not only analyses the size and shape of a person's signature but can also identify specific handwriting styles as well as the amount of pressure put on the pen, which, when combined, is unique to an individual and is near impossible for fraudsters to emulate.
Beyond this, voice recognition is another facet of banking that could do with more biometric implementations. As banks interrogate people over the phone from call centres to confirm identities, Khan believes voice recognition biometrics are at a stage where identifying a person's voice will save time and money.
"The simple answer is biometrics are the way forward when combating fraud," says Khan. "The faster we move towards biometrics as a system for identification, the faster we can deal with the ludicrously high levels of fraud experienced every day in the banking and credit sector."
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