Secure digital identity takes on new importance for South Africans amid lockdowns
This is a guest post by Tshepo Magoma, a Yoti Digital Identity Fellow.
With the fast spread of COVID-19, South Africa has recently been regarded as one of the top five worst-hit countries globally, and is rapidly looking at various opportunities in the digital revolution. Due to the pandemic, the country is currently facing several challenges at the moment, and this stems from calls to postpone the 2021 municipal elections, and other requests to allow elections to take place online by enabling citizens to electronically vote, signalling the need for a comprehensive digital identity to facilitate the process. The re-opening of the schools has also been a burning issue, which was met with considerable criticism from the public, with divided calls to close the schools altogether, and other requests to save the academic year.
However, one call has also been to look at options to allow learners to study online, with several start-ups and businesses now tapping into the digital school market. However, this has also been met with resistance due to lack of infrastructures, such as WiFi and the need for urgent digital literacy training in remote marginalised areas. While universities have adopted the use of online learning, other human rights organisations have been against the move, citing the lack of resources such as laptops, propelling the government to increase its student-related aid. Digital schools are also faced with resistance due to the country’s challenges, including traditional school-related fraud.
The banking sector continues to be the hard-hit industry when it comes to fraud, In 2018 alone, South Africans lost a total of R129 million (US$7.4 million) alone due to online fraud, and this has been permutated by fraudsters who utilises the use of phishing emails, requesting users to click on the sent links, that redirects them to website that is spoofed which leads victims to think it’s the correct website of the bank. This has then led to customers entering or verifying even as far as updating their contact details and other sensitive financial information to sites of the perpetrators who will then use them to steal their money.
Other fraud also occurs at ATMs, where perpetrators offer to help people to withdraw money from an ATM by putting in machines that clone the card of the victim, making the victim panic, thinking the card has been swallowed by the machine. The fraudster will send the victim to the branch to report a lost swallowed card, while the fraudster takes the money out of the victims account through the ATM. As such various groups have instigated the availability of having security personnel at every branch, but it is hardly possible to keep the staff 24/7. These kinds of scams present opportunities for biometrics and AI to alter the future of ATMs so one can easily withdraw money without having to insert a card on the machine. Biometrics can be used to allow individuals to rather interact with the ATMs through digital identity verifications. While this is on the future agenda, South African banks have been re-inventing the wheel of traditional banking.
The financial industry sector continues to embrace digital ID and has now been the driving force of digital identity, due to an increase of people attempting to open bank accounts or do financial transactions using identities of the deceased. As such the banking industry has seemingly been working with the Department of Home Affairs to access the identities of people who want to open a bank account, in order to conduct verification, and that has allowed the banks to also do online biometric fingerprint verification which has been essential during the pandemic.
As with cybercrime, the number of reported cases on the loss of bank-issued cards has increased at alarming rate of 20.5 percent. This is due to the fact that criminals continue to use various method to find and gain access to clients’ card data, making transacting with a physical card more dangerous, since client hardly get new card unless it’s been lost or expired, unlike introducing a virtual card, that can have CVD or CVVs number that can expire after a particular transaction. In 2019 Card Not Present (CNP) fraud was at 62 percent of gross fraud losses on South African issued credit cards, followed by False Applications (27.1 percent) and Counterfeit (5.7 percent) fraud.
During the pandemic, banks such as First National Bank (FNB) recently launched their own virtual bank card, which will enable the client to leave behind an actual bank card at home. This means that customers can pay for goods at the till by merely tapping their phone; no physical ticket is required. Nedbank also announced its own, very different “tap-to-pay” system last month, in which customers can use their phone at checkout points and tills. This all effort to ensure that there is less physical contact between the client and the cashier, which will limit the spread of COVID-19. COVID-19 has also forced universities to close the campus gates and operate virtually, and they have also captured the benefits of virtual qualification verification systems, by enabling students to receive digital certifications.
While the efforts to use digital ID in financial Sector have been much clearer for the financial sector, in the higher education sector, the debate has also been on how digital identity can assist universities in minimizing fraud during online exams, and also looking on how digital ID can help universities to regularly monitor students movement and access to the university premises since fingerprint biometric systems have been paused due to COVID-19. Since lockdowns began, South Africa has limited inter-provincial travels, unless for a funeral, or for medical purposes, as well as essential services.
On a national level, since the inception of lockdown, various members of the police force and the South African Defence Force have reported being infected with COVID-19. Multiple calls have therefore been made for traffic cops and metro police to be able to utilise the benefits of digital identity, for instance, to electronically verify driver’s permits, and other essential documents, without having to physically interact with different road users or pedestrians during document inspections. It is safe to say that COVID-19 has fast accelerated the need for digital identity in South Africa, and more people and organisations are starting to realize its need and intended purposes.
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