The role of eSignatures in fraud prevention

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By Carrie Peter, Impression Signatures

For many organisations, the value of auditable proof only becomes evident after they have incurred the cost of defending the validity of a contract or transaction. While cloud signatures do not yet have the support of underlying legislation, there are still measurable benefits to using eSignatures. For instance, preventing fraud is always preferable to prosecuting it, and this is where the security, trust, and identity verification capabilities of eSignatures offer protection. 

When it comes to fraud prevention, it is a risk-based approach: those responsible for perpetrating fraud must gain enough from the it to be able to warrant the effort involved. Adding layers of verification, authentication, and control through the eSignature process ensures that the degree of effort can be balanced against the potential associated loss. Put simply, the cost of the loss determines the cost of the security controls implemented to mitigate the loss. 

Even crime is a business that needs to break even, so the pay out from the fraud must warrant the amount of effort a fraudster had to invest to commit the fraud. Practically, the value of layering security controls can be seen by examining the most common types of fraud in contracting and claims: 

  • Transaction fraud – taking advantage of transactional systems and processes to steal money/things. 
  • Identity fraud – posing as someone or creating a fictional person to steal money/things. 

Creating a synthetic identity is often the preferred attack vector for attackers. Variations include posing as victim’s service providers to get them to provide account log in details, or falsifying life insurance or tax claims using forged documents. Both are examples of a synthetic identity of a fake person or organisation. 

With the onset of the COVID pandemic, there has been a sharp rise in identity fraud globally. There has also been a rise in difficulty for legitimate people trying to go about their day-to-day business remotely. Certainty of identity is becoming more critical as we are not permitted to be in the same space as one another. 

Even though eSignatures may not yet be supported by underpinning legislation, it is clear that from both the protection and the convenience of customer’s eSignature solutions can become the backbone of security. 

Within the Cloud Signature Consortium (CSC), there are several eSignature solutions that are revolutionising the certainty of identity through access control, biometric identifications, remote face to face identification, and biometric video signing. These innovations are allowing the companies and governments that rely on these solutions to offer sophisticated security measures behind simple customer centric signing. 

The Cloud Signature Consortium in piloting and driving these global standards with the roll out of the CSC V 2.0 standard, and the interoperability of these efforts, made by CSC members, enables users to offer trust and identity security more widely, and with improved portability.