Banks, we don't trust your documents!

Listen to our CEO, Dev Naicker's 12 minute interview with ScottCundill.com on "Creating a Corruption-Free Zone" in your business.

What would it mean for your business if you could trust the authenticity of high-risk documents 100%?

In May 2018, a video went viral showing just how easy it is to create a fraudulent pay slip in South Africa. If that wasn’t enough, the fraudsters even offered a ‘follow up’ service that authenticated the pay slip details by posing as an employer.

Why should business care? Fraudulent payslips are being used as a way to verify a false salary to apply for home loans, store credit, vehicle finance and even as a way to increase earnings when moving to a new employer. Apart from the estimated R100 billion in lost revenue, it begs the question why business is not getting more serious about finding an innovative solution to solving this external, but preventable, threat. In the PWC Global Economic Crime and Fraud Survey South Africa 2018, ‘fraud committed by the consumer’ ranked third on the list of ‘most disruptive economic crimes likely to be experienced by business over the next 24 months’.

And it’s not just payslips. Digitally altered documents such as invoices with altered account details leading to fraudster’s bank account, procurement documents with falsified supplier information and payment orders with inflated costs, point to the fact that fraud is taking place across the corporate supply chain.

The rules are changing for business, with tolerance for the perceived tacit acceptance of fraud and corruption now becoming a reputational risk. With the risk of fraud moving from an operational risk to a threat to the entire business, old style, anti-fraud procedures are no longer enough.

High-value documents like payslips, invoices and procurement credentials are the cogs of our economy. When we can no longer trust their authenticity or accept them believing them to be an accurate reflection of the truth, our whole business system is put at risk. The costs of proactively preventing fraud pales in comparison to the costs that are incurred to prosecute it. 19% of South African organisations have had to spend between twice and ten times as much on investigations as the original amount lost. (PWC Economic crime survey 2018)

The future of fraud detection lies in finding a balance between the costs of revolutionary technology and the silent growth of fraud. Effective solutions need to be cost-effective and simple while intelligent enough to outwit the many fraudsters who are constantly combining brain power and machine intelligence to go on the attack.

Prevention is better than cure

Fraud occurs in all kinds of companies, whatever industry they operate in. Last year 77% of South African businesses indicated that they had discovered some level of fraud or corruption. This figure places us as the world leaders in economic crime. Ironically technology has made altering documents infinitely easier and much harder to detect. Scanners, PDF documents and universal fonts make forging a document child’s play. The solution lies in making a document ‘unalterable’. Revolutionary anti-fraud technology, a first in South Africa, creates a digsig – a digital signature secured in a QR code, that is embossed onto a document or encrypted onto a digital platform. The digsig secures the authenticity of the information by securing the information digitally, thereby protecting the original data and rendering it immune from alteration or forgery. The authenticity of the information can be checked via a mobile app. It is a revolution in the fight against counterfeit documents like payslips, proof of payment, proof of accounts, title deeds and academic qualifications.

Imagine a world where business can trust every high-risk document they receive? Retailers would no longer have to carry the cost of pay slip fraud. Information on invoices would ensure proof of account details could never be altered to fraudulent bank accounts and share certificates, security passes and any digital document could be trusted at face value. This could extend to counterfeit goods where a digsig could validate the authenticity of the product.

Are the bad guys winning?

They say you have to think like a thief to catch one. But fraudsters are not resting on their laurels. Every day a new risk emerges for business as dishonest employees and consumers refine their tactics. As South Africa wakes up to the fact that we lead the world in economic crime, business leaders must look to new ideas and innovations to restore our reputation. Failing which South Africa’s future looks bleak.