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Mobile devices hold the key to combating benefits fraud

A significant portion of the risk associated with benefits fraud comes from the mobile devices people use to access their benefits, and it’s here that government agencies can focus their efforts for greater effect.

Mobile devices hold the key to combating benefits fraud
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Government agencies have faced ongoing challenges with account security and identity proofing, and the Covid-19 pandemic has only exacerbated this issue. Suddenly, agencies had many more claims for benefits being submitted, and often, these claims were fraudulent. As the country continues working to make strides toward a sense of normalcy, it’s an opportune time to prepare for future crises by using available tools now.

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Government benefits programs are often a high-payoff target for scammers, but the problem reached epic proportions over the past 18 months. These scams often target elderly customers in particular, but throughout the pandemic, they’ve extended to target anyone drawing from government benefit programs. A significant portion of the risk associated with benefits fraud comes from the mobile devices people use to access their benefits, and it’s here that government agencies can focus their efforts for greater effect. At TransUnion, we’ve developed multiple solutions to combat fraud in the public sector, including facial recognition with real-time verification and liveness detection and incorporating machine learning, and we’re seeing a big opportunity for agencies to better manage device risk.

MOBILE DEVICE OPTIMIZATION

First, government agencies need to embrace the fact that many customers will use mobile devices for transactions. Mobile devices have a different risk profile than laptops or desktops, and benefits portals need to be optimized for these higher-risk devices. For example, scammers and fraudsters often find it easy to target people’s smartphones through smishing or phishing attacks or unsecured Wi-Fi networks. However, even though some risks are unique to smartphones, they also lend themselves to more secure account management.

Government agencies’ inability to fully verify applicants’ identities costs Americans billions. With understandably limited resources, these sorts of easy mistakes should be addressed quickly and efficiently. Smartphones have all the capabilities necessary to improve identity proofing for benefits programs. Their small size, built-in biometrics hardware and broad applications make them a critical tool in the fight against fraud.

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SMARTPHONES: THE PATHWAY TO BIOMETRICS

Most smartphones have biometric authentication systems built in. In addition, they have facial recognition software that’s impressively accurate and would be difficult for scammers to fake. Considering tech already exists where smartphones and watches can analyze heartbeats, it’s not hard to imagine a future where this and other biometric data would create even more secure identity proofing. If benefits programs could use similar technology to authenticate applicants, with the applicants’ knowledge, consent and appropriate limitations on use cases beyond authentication, the added security could result in billions of dollars saved.

Biometrics move beyond simple facial recognition, however. Even more secure systems could use retinal scans or even behavioral measures, such as a hand gesture, to provide even better authentication for customers. My company and others are, for example, pairing biometrics with machine learning to uniquely identify a device so that it is properly recognized and can be compared against configurations that are reminiscent of nefarious intent. However, if government agencies were to incorporate even something as ubiquitous as facial recognition, it would likely cut down on the amount of fraud significantly. Granted, biometric measures can be very costly to implement at this stage of development, but even something as basic as using existing facial recognition software would be a start toward securing digital transactions.

The key for benefits agencies is to incorporate more security while simultaneously streamlining the customer’s experience. For example, clients may be turned away by overly complex security measures, like uploading pictures of an ID or submitting copies of documentation. While these added measures may make the transaction more secure and reduce the odds a fraudster can perform an account takeover, it also creates a more onerous user experience. For Americans in need of aid, this is simply not acceptable. Enter artificial intelligence and the potential to truly turn the tide.

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AI’S POTENTIAL TO TURN THE TIDE

AI provides the promise of vastly increased computing power and identity proofing to an almost astounding degree. In addition, AI can bridge the gap between humans and authentication by providing real-time behavioral analysis, identifying potential risk factors and dynamically applying risk mitigation measures to each individual transaction.

Government employees recognize that AI holds the key to securing online transactions. Several private companies, including us, already have the capability to build a user’s device profile to authenticate and flag potentially fraudulent devices based on historical data. When a user authenticates, their device is stored for future transactions. For example, logging in from a different device might set off a red flag which would require additional log-in credentials.

It’s not just the employees, either. Agency leaders agree that AI and improving identity authentication will help them deliver a better customer experience while ensuring greater security. More than two-thirds of respondents in our recent study said more investment in these two areas is necessary to achieve this goal. In fact, 65% predicted that AI tools will improve both security and convenience for customers when accessing their online accounts, and 61% believed that authentication improvements will also improve access governance and user experience.

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AI also offers solutions to problems like synthetic identities, where scammers create an online identity for the sole purpose of fraudulently applying for benefits. For example, AI could identify patterns indicative of synthetic identity creation, which could crack down on this lucrative way for scammers to claim benefits. What’s more, AI can draw from a consortium of data fed by dozens of other companies to identify signs of known fraud.

These solutions are only effective when they’re actually implemented. So before the next crisis strikes, government agencies need to incorporate identity verification into their application processes. By taking small steps now, they make it more likely they’ll be able to rapidly respond to future crises while maintaining a secure authentication process.


Jonathan McDonald leads TransUnion’s Public Sector business, which provides a suite of mission-critical solutions to U.S. agencies

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