Prevent fraud in the public sector

Bala Kumar, CPTO at Jumio, advocates prevention rather than remediation to combat future fraud in the public sector

Fraud and spending errors in the public sector cost the UK government an estimated £33.2 billion to £58.8 billion in the first two years of the pandemic, not to mention the £21 billion in fraud directly related to the pandemic response , as the National Audit Office reported – This shows how vulnerable government systems can be in times of crisis.

While the pandemic accelerated the digital transformation of many public services, such as HMRC’s Income Support Service, these advances also opened the floodgates for fraudsters to quickly adapt and implement current technological advances such as artificial intelligence (AI) to exploit vulnerabilities in new digital infrastructures .

In recent years, fraudsters have undoubtedly become more sophisticated in their use of technology. Fraudsters are developing more credible methods to convince victims to part with their money and creating more realistic data trails and documentation to cover their tracks. It is clear that spending on reactive approaches alone is not enough.

If the public sector wants to protect taxpayer dollars and maintain trust, prevention must be a priority. New technologies – particularly AI, machine learning and biometric verification – offer the ability to detect, block and prevent fraud before it occurs. By prioritizing proactive measures, governments can stay ahead of increasingly sophisticated fraud tactics and protect public resources.

Adapting to new threats: AI vs. AI

The maturity and accessibility of AI tools make fraudsters’ attacks more sophisticated, automated and scalable than ever before. Scammers are going beyond the crudely crafted phishing attempts the public was accustomed to and producing highly polished, convincing emails posing as legitimate organizations. This perceived authenticity has made it more difficult for individuals and even government systems to distinguish between fraudulent and authentic communications.

But just as AI is used as a weapon, it can also be a diligent defender against these new fraud tactics. Machine learning enables systems to process ever-growing data sets and detect unusual behavior or patterns related to fraudulent activity. By continually learning from these patterns, AI-driven models will be better able to detect new fraud techniques, allowing governments to keep pace with ever-innovating criminals. With AI, fraud detection occurs in real time, reducing the opportunity for fraudsters to exploit any vulnerabilities they may find and fix them before others can follow.

In the battle between fraudsters and potential victims, AI is both the problem and the solution. However, the targeted adoption of certain technologies can help governments build more resilient defenses that stay one step ahead of fraudsters, and use and refine AI as a strategic tool to stay ahead of criminal innovation.

Biometrics and digital identity verification

Government agencies are under more pressure than ever to prevent identity fraud and provide a secure yet efficient experience for their constituents. The right technologies – artificial intelligence, machine learning, identity verification, biometric authentication and liveness detection – all help improve the security and quality of public services. This starts with identity verification and liveness detection to ensure that the person opening an online account on a government portal is who they say they are and that they are physically present during the onboarding process . Biometric authentication ensures that the person logging into this account is the same person who signed in.

These methods go hand in hand and present hurdles for fraudsters that affect the scope and speed of their campaigns. They also protect government benefits that are vulnerable to online fraud and identity theft. They also provide a robust alternative to inadequate tactics like passwords and knowledge-based questions.

The future of fraud prevention in the public sector is bright

As the UK government changes its AI investment strategy to prioritize public sector adoption of the technology, these preventative approaches to combating fraud are clearly becoming a priority.

Discovery projects planned for 2024-25 aim to explore how AI and machine learning can be better integrated into fraud detection to demonstrate the government’s awareness of keeping pace with fraudsters.

Collaboration between the public and private sectors is also crucial. They ensure that fraud detection technologies can be shared, refined and effectively deployed across all levels of government, and standardized alongside private sector efforts to protect against the same fraud methods.

By using AI, machine learning and biometrics, the public sector can remain agile and adapt to new fraud tactics in real time. These technologies are key to building resilience in the ongoing fight against fraud.

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