Identity theft still biggest hurdle for e-commerce

Dubai: The perennial threat of identity theft has hampered the growth of e-commerce and digital businesses as both business organisations and consumers remain fearful of becoming victims, according to a top official at Software AG.

"Identity theft, the act of using illegally obtained personal information to commit fraud and other crimes, has become a significant threat to societies around the world. Credit card fraud alone, one of several types of identity theft-related crimes that collectively deliver a significant blow to global economies, was estimated to have caused up to $10 billion [Dh36.7 billion] in losses last year," Marco Gerazounis, senior vice-president of Software AG, told Gulf News.

He said in the UAE, around $54 million (Dh95 million) was lost to credit card fraud in 2009, representing an alarmingly high 20 per cent increase over 2008.

"Identity fraud is the world's fastest growing threat to economic stability and personal security, considering the increasing number of people affected and the growing amount of money lost each year to various identity theft-related crimes. There is certainly a real threat and everyone is a potential victim because personal information such as a person's name, social security number, address, date of birth, bank account number and even passports can be easily stolen or faked in the absence of stringent security and ID authentication measures," he said.

"While the economic repercussions have been substantial and increasing, identity theft has an even greater and more destabilising impact on social security and personal safety. In the most recent high-profile criminal activity to rock the world, identities of 26 European and Australian nationals were fraudulently used to carry out a political assassination in Dubai, which demonstrates the extreme dangers being posed by identity theft. More importantly, such an incident clearly demonstrates the vulnerability of even the most powerful countries against criminal activities that are related to identity theft," he said.

One of the key measures proposed by identity management specialists is to implement a more secure electronic ID system as the primary mechanism for citizen authentication. Biometric data could also be added as another layer of security and authentication to confirm identity, particularly at border controls or for internet transactions.

Breakthroughs

Implementing more secure electronic IDs had been a difficult challenge for governments and the private sector in the past, considering the technical limitations of existing IT infrastructure.

Gerazounis said recent technology breakthroughs had made it possible to take advantage of more advanced and reliable identity management solutions for protection against identity theft.

He said: "Technology restrictions had been the foremost obstacle in implementing a more secure way of authenticating citizenship and protecting people from identity theft. We are past that phase now and I think that governments and private agencies should take advantage of more advanced techniques and technology for identity management."

Aside from huge financial losses, he said that identity fraud can also result in considerable damage to the reputation of affected individuals or business organisations. Many people whose personal data have been stolen and used illegally have often ended up losing job opportunities or have been denied loans for education, housing and even medical expenses mainly because of negative information on their credit reports. Some have even been arrested for crimes they did not commit.

The fastest way to implement a modern electronic ID authentication system is to use identity management solutions that are able to leverage existing infrastructure and technology. Software AG cited its work on the Spanish Electronic Identity Card (e-ID), which was developed and implemented on top of existing IT systems.

Software AG has developed new functionalities of the e-ID and created a new ID issuance system that integrated various processes and security measures under a centralised IT architecture. The UK Government also recently upgraded its Visa system, particularly with regards to the process of collecting biometric data and other details. Software AG revealed that it has already started offering the same identity management solutions to companies in the Middle East, enabling clients to use existing technology to issue new electronic IDs at a fraction of the cost of standard IDs.

It is imperative that business organisations and government agencies adopt a more secure identity management solution. Moreover, on account of the prevailing economic condition, Software AG believes that it is equally important to offer a solution that makes it possible to reduce the development time to produce new electronic IDs, resulting in significant cost savings. Software AG is offering a truly cost-efficient identity management solution as our way of encouraging a greater number of corporate organisations to adopt a genuinely effective way to secure data and personal information," Gerazounis said.