Skip to content
Log InGet Started
Fraud Prevention 26 Apr 2024

How to Prevent Digital Identity Fraud in Africa

Emmanuel Agwu

Identity fraud is a type of crime where a perpetrator uses someone else's personal information, such as their name or identity documents, without their permission, typically for economic gain. This can involve various fraudulent activities, including opening new financial accounts, purchasing, or committing crimes in the victim's name.

 

Our KYC report for the first half of 2023, based on over 75 million checks, reveals that biometric verification has emerged as a highly effective tool in combatting fraud. This approach has successfully reduced the number of fraudulent users by 50%. 

 

These findings highlight the importance of biometric checks, particularly facial recognition, in identifying fraudsters when traditional text verification is insufficient.

Identifying identity Fraud trends in Africa

As businesses operating in Africa, it is crucial to understand the current trends in identity fraud. This knowledge will enable you to identify red flags and effectively address these threats in real-time. 

 

Here are some prominent trends to be aware of in 2024:

a. ID Theft

A prevalent form of fraud involves using stolen IDs, where an individual attempts to register for a service using a document or ID number belonging to someone else. Since these are genuine IDs, a basic KYC check focusing only on textual validation might mistakenly approve them. In this situation, proper KYC identity verification is recommended. 

b. Selfie spoofs and ID mismatch

Our State of KYC Report 2023 highlights this as a new trend in identity fraud, particularly facial biometric mismatches and selfie spoofs. Fraudsters increasingly use valid ID numbers with mismatched facial biometrics, exploiting gaps in biometric systems. They also use advanced techniques, such as printed face masks or images, to impersonate ID owners.

c. Synthetic identity fraud

Another emerging concern is synthetic identity fraud. In this scenario, criminals create new identities by blending accurate and falsified information. This combination of identities can bypass traditional manual verification methods, creating a significant challenge during customer onboarding. Synthetic identity fraud is a highly sophisticated form of fraud that is difficult to detect and counter, making it a growing threat.

d. Business Registration Fraud (B2B Fraud): 

This involves using fake or compromised business registration details to manipulate onboarding systems. This type of fraud is prevalent in B2B businesses, where fraudsters may create fictitious accounts, potentially leading to significant financial losses and undermining user trust if not addressed adequately. The right Business verification solution can help prevent this.  

Top 4 Ways to Prevent Digital Identity Fraud as a Business

We have picked out the four most reliable methods to prevent identity fraud for African businesses; these methods have been tried and tested, demonstrating effectiveness in safeguarding sensitive information and ensuring secure transactions.

1. Educate your Employees

The first defence against identity fraud is to educate your employees and conduct frequent educational sessions focusing on the nuances of identity fraud.

Key topics should include:

  • If someone suspects identity fraud, what steps should they take?
  • Monitor credit reports and bank statements for anomalies.
  • The role of biometrics in preventing impersonation fraud

2. Use biometric Verification Technologies
Biometrics refers to unique physical or behavioural characteristics that can be used to identify an individual. Examples of biometric identifiers include fingerprints, facial features, iris patterns, voice prints, and hand geometry.
 

Biometric technologies use these identifiers to verify an individual's identity. These systems typically capture a sample of the user's biometric data and store it in a database. When users need to authenticate themselves, they provide another instance of their biometric data. 

The system then compares this new sample to the stored data to determine if there is a match.

Biometric authentication technologies offer several advantages over traditional authentication methods, such as passwords and PINs. Biometrics are not easily forged or stolen, nor can they be easily shared or forgotten. Furthermore, biometric authentication systems are highly accurate and reliable.

3. Implement Multi-factor Authentication (MFA)

Multi-factor authentication (MFA) is crucial to bolstering your business security, especially if you do business across Africa. To effectively prevent identity fraud using MFA, you should focus on the following:

i. Implement secure MFA methods: 

Encourage your customers to implement MFA to secure their accounts, preferably using a selfie match or authenticator app instead of SMS-based codes. These methods are more reliable and more secure.

ii. Ensure the deployment of MFA across all systems

Implement MFA systems that prioritise your organisation's most sensitive information, such as user and financial information.

iii. Regular security reviews and updates: 

Continuously assess and improve MFA and other security measures.
 

Focusing on these critical areas can significantly bolster your business's defences and customers against identity fraud, safeguard your digital infrastructure, and maintain customer trust.

4. Leverage automated technology

 

Preventing identity fraud manually can be difficult and does not guarantee a high success rate. You must rely on automated technology, like our fraud prevention solution. Smile ID helps hundreds of African businesses reliably prevent fraud with our biometric authentication tools. 

An automated biometric verification and authentication solution can help:

i. Match faces against reliable sources: 

ensures that only legitimate users can register for accounts by using biometric face matching. We match selfie photos to 20+ government ID authority databases and hundreds of official photo ID documents across Africa. Book a free demo to learn more today.

ii. Detect duplicate accounts: 

The system scans all previously checked faces and notifies if there is a match, indicating whether a user has once signed up for or attempted to sign up for the service. This helps detect duplicate accounts, a common tactic in fraudulent activities. Our Smile secure solution empowers businesses to seamlessly achieve this during customer onboarding. Book a free demo to learn more

iii. Prevent fake images from passing: 

Ensure the individual trying to authenticate is physically present and not using a photo or video. Our liveness and spoof detection feature identifies a wide range of fake images, including simple fakes like photos of printouts and complex, deep fake images, ensuring the authenticity of the user behind the camera. 

iv. Accurately match faces: 

Our biometric authentication product is designed explicitly for African faces and trained on over 5 million, resulting in a real-time matching accuracy rate of 99.8% for faces of all skin tones. This high level of accuracy is critical for correctly identifying users.

Conclusion

Ultimately, African businesses face a significant challenge in combating identity fraud. This problem costs the continent billions of dollars annually. Leveraging biometric technologies is one way to start tackling this issue effectively.

 

Preventing identity fraud in Africa requires employee education, advanced technology like biometric authentication, and a comprehensive security approach. By adopting these strategies, African businesses can significantly enhance their defences against the growing threat of identity fraud, ensuring the safety of their customers' data and maintaining their business integrity.

 

Smile ID solutions are designed to provide you with comprehensive AML and KYC coverage in 54+ countries across Africa. Our APIs and SDKs are designed for easy integration with and interaction with your existing infrastructure. Book a free demo today to learn more.

 

Book a free demo to learn more today.

Ready to get started?

We are equipped to help you level up your KYC/AML compliance stack. Our team is ready to understand your needs, answer questions, and set up your account.