Last year, 282 globally reported natural disaster events led to an estimated $107.77 billion in damages, according to Our World in Data. When floods, forest fires, hurricanes and other natural disasters hit, much-needed aid flows in response. Yet, with the delivery of relief aid often comes opportunity for crime and identity fraud. The National Center for Disaster Fraud has received over 95,000 complaints related to disaster fraud since 2005. Fortunately, identity authentication technology currently on the market can go a long way toward addressing this problem, if the right approach is taken.
At times when natural disasters have left victims in their most vulnerable state, a wave of financial crime has taken hold. Fraudsters assume the identity of victims (individuals and businesses) to intercept aid intended to help victims get back on their feet. In an attempt to speed up the overall process of distributing aid, many aid organizations rely heavily on the use of digital and mobile technologies, which unfortunately can inadvertently create loopholes for fraudsters to exploit. With such a heightened level of risk, how can trust be maintained between donors, victims and aid organizations to ensure the proper flow of much-needed funds?
The answer lies in building a multi-layered approach to verify and authenticate the identities of people and businesses affected by disasters to ensure that relief funds reach their intended destination. Adding multiple layers of identity authentication makes it more difficult for fraudsters to infiltrate the process and builds trust with all entities involved.
Trust is the backbone of today’s fast-growing global economy, yet it’s become elusive as today’s digital technologies have opened doors for fraud. Amidst the chaos and displacement of people and businesses following a natural disaster, the potential for fraud to occur is substantial. In such climates, trust is vital to ensure that fraudsters don’t disrupt the flow of funds.
A verified identity is the first layer of trust between natural disaster victims, nonprofits, governments, financial institutions and other entities involved in the process. As in most online interactions and transactions, anonymity is the biggest threat to trust and it can impede investment. For disaster relief aid, anonymity can be a major problem. When people wanting to donate to natural disaster relief efforts don’t trust that a certain organization will deliver the funds to victims, they may withhold aid entirely. Similarly, when an organization doesn’t have the means to properly verify victims, funds may get delayed and some victims may not receive the needed help on time, or at all.
The key to these concerns is ensuring that all online transactions are built on a layer of trust. Failing to do so can result in regulatory pressure and investigation — even punishment — and can lead to a decrease in donations from the public. So, how do we go about establishing trust to ensure aid flows correctly? The answer lies in verifying identities.
A multi-layered approach
The disorder and misery following a disaster can be overwhelming and it unfortunately provides ample opportunity for both financial and ID theft: multiple respondents and agencies must work as quickly as possible and often, people are without essential documentation, computers and mobile devices. In these cases, a multi-layered approach is a reliable solution to establishing trust amidst chaos. This approach to ID verification leverages multiple data sources in combination with advanced machine learning algorithms and fraud prevention tools to confirm the identities of people and businesses affected by disasters while weeding out the fraudsters.
Without a multi-layered approach, a digitally savvy consumer can effortlessly conduct business from their phone, but if a fraudster steals their ID and resets their email password, this restricts the victim from important activities, such as verifying their identity to receive aid. The fraudster can receive the aid by pretending they’re the victim; meanwhile, the rightful user cannot do anything about it. On the contrary, with a multi-layered approach, the disaster victim would have set up their email account so that if their password fails they can authenticate the account through another method, such as a thumbprint scan or face recognition. Such biometric identifiers are not replicable by the fraudster, and they enable the system to differentiate between two different people who are presenting the same set of legitimate-looking credentials. When it comes to organizations, using a multi-layered approach means they can leverage the additional biometric identifiers and combine them with advanced algorithms and tools to verify the identity of a victim via a more secure method.
If one biometric identifier was the only identity data point, security issues, such as fraud, would be cause for concern. However, when layered in with numerous other data points, it’s not a single point of failure but rather just part of the overall security system. Thus, traditional records such as data from credit sources, electoral roll data and national ID (i.e. ID card, driver’s license) can be layered with biometric identifiers and passed through advanced machine learning algorithms and fraud prevention tools to create a verified online identity. Since aid needs to move as quickly as possible during a disaster, these multiple layers serve as checkpoints to remove fraudsters from the process without the manual labor, thus ensuring that funds end up in the hands of those who truly need them.
Technology is transforming the way natural disaster relief efforts are handled. Mobile and financial technologies have made payments and transactions easier, but they also present more attack points for fraudsters. Unfortunately, where there is a disaster there is also fraud. Implementing a multi-layered approach to create a strong security system with numerous data points will ensure that aid funds flow uninterrupted in the right direction. Most importantly, it maintains trust in the aftermath of a disaster where victims may have lost everything and organizations face increased risk.
This article first appeared on Biometric Update.