Thought for the day:
Cards put finance at risk
- Posted:
- 17:02 26 May 2004
The government must help standardise ID card verification by working with the industries that have the most to lose, says Tony Thomas.
ID cards will present myriad challenges and pitfalls to
thefinancial services industry.
Although biometric data provides an additional level of security
toestablishing a person's identity, there are questions about how
this data will be secured and who will have access to the central
register database.
The cards are not a magic bullet to cure all ills. Although they
can help financial institutions in their fight against organised
crime, there are concerns about how the government intends to
confirm every individual's identity.
As people apply for ID cards, criminals who already have fraudulent
documentation from a prior identity theft may try and register
themselves under a false identity at the outset, thus giving
themselves the opportunity tolegitimise a new identity for further
fraudulent activity.
Even if caught and prosecuted, it is unlikely that future
applications to financial institutions would be blocked unless some
record of misdemeanors were kept on the government's central
database and access to this was granted to firms.
Currently, credit reference agencies only keep personal records for
a short period. If the government is serious about cracking down on
financial crime, why not assist the financialservices industry
while they have the opportunity?
How will a financial service provider be able to check an ID card
when it is presented as a means of identification for opening an
account? Can a central database be checked to confirm a card's
authenticity? During the run-up to compulsion in 2013, will
financial services providers be in a position to check for
impostors who claim that they cannot verify their identity by ID
card as it has not yet been issued?
If ID cards become mandatory, it is possible that firms will be
forced to introduce biometric reader machines at every branch.
Without bringing in identification verification standards across
the industry, room for interpretation is left open. Best practice
standards will be inadvertently set by the bigger banks, forcing
smaller institutions to follow suit, as has been seen with
anti-money-laundering. And who will bear the cost of compliance
with this requirement?
The government should beapplauded for its decision to run a pilot,
but with a sample of only 10,000 users when the end-game is for 60
million, the system will need severe stress testing to ensure it
can cope with the volume. This will be especially important when
making sure that technological anomalies such as false negatives,
false positives and "no data found" are eliminated.
Fraud and identity theft willget worse before they get better. ID
cards will reduce fraud in the long term, but the government needs
to work with the industries that have most to lose from
aninadequate system being made compulsory.
Tony Thomas is principal fraud consultant for
SAS UK
