Businesses need tech to protect ID

Businesses reliance on paper documents to prove identity is partially to blame for the growing rate of fraud, according to a report by Experian, the global information services firm best known for credit reports.

This kind of identity fraud costs the UK economy £1.7 billion annually, with 80,000 cases reported last year, the report said. While 71 per cent of businesses said identity fraud was a challenge for them, many still rely on paper for authentication - and it's time for an upgrade, said Anne Green, a fraud consultant at Experian.

"It's staggering to think that today's businesses are still using paper documents to confirm a person's identity," she said in a statement. "Take passports for example. They actually date back to the 15th century and were intended for travel, not verifying a person who wants to open a bank account. Companies need to break the paper chain and move with the times."

According to the report, 70 per cent of financial services companies still use utility bills, bank statements or passports for identification. Over a third of retailers and 40 per cent of telecoms companies do they same, the report found.

It's time for such firms to move to electronic authentication, said Green. "It's faster, safer and cheaper than paper processes," she said. "Unlike relying on paper identity documents, it tracks the key financial events in people's lives, together with their data history, and cross-references them electronically."

Some 70 per cent of consumers think it's easy to forge utility bills or bank statements, and 50 per cent think driving licences aren't secure. Another 68 per cent of customers find it inconvenient to provide such documents, the report said.

Despite this, about a third of retail and finance firms don't believe that a case of identity fraud will hurt their reputation. Nonetheless, three-quarters of customers interviewed for the report said they wouldn't use a firm with a history of data breaches. Telecoms firms are more inline with their customers' feelings on fraud, as 80 per cent realise it could hurt their business.

"Companies are clearly blind to the negative publicity associated with identity fraud," Green said. "They are not only playing Russian roulette with their own exposure to potential fraud but also with their customers'. Losing customers' trust can do significant and often irreparable damage to brand value. Customers have opened their eyes to the dangers of identity fraud; it is time that businesses came out of the dark ages, woke up and did the same."

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