How Nigerian firms can tackle identity fraud

Identity fraud is a growing problem across Africa, costing businesses millions each year, and the government-issued identity documents have remained the cornerstone for ID verification in today’s digital world.

Smile ID, an African digital ID verification platform, reported that Nigeria is among the 10 countries with the most-attacked ID documents by fraudsters in Africa due to the broad adoption of digital and biometric ID verification.

Document fraud involves misrepresenting an ID document to mislead others about the holder’s identity which could be either through a fake document or stolen IDs.

“Common ways that fraudsters get access to real documents include when they get lost at festivals, concerts, markets or pickpocketed from wallets. Scammers can also buy stolen ID information on the dark web from database hacks that are common across the region,” the report said.

Fraudsters seeking to access financial services usually attempt to bypass onboarding protocols using compromised documents.

However, there are two major ways that businesses can fight document fraud. Businesses can either verify the identity’s validity against ID authority databases or through document verification by comparing the ID document with authentic templates and security features to find inconsistencies.

“Since document fraud involves the manipulation of actual documents, bad actors can bypass text-only verification measures that simply validate numbers against a database,” the report added.

It emphasised that combining document verification solutions with biometric authentication adds a layer of security, ensuring that only authentic documents from real people scale through.

According to SmileID, they can set up a comprehensive anti-fraud document system that includes biometrics and allows both authenticate documents submitted and verify personhood/true ownership with a selfie or liveness test.

They can also check for duplicate accounts using a biometric deduplication engine like Smile Secured and use Anti-money Laundering (AML) checks to verify that customers are not on any watchlists or sanctions lists.