How Intelligent Document Processing Is Helping Tackle Document Fraud In Ireland & the EU

Document fraud, the act of falsifying or manipulating official records, has become a growing concern in Ireland and the EU in recent years. From forged passports to fraudulent invoices, this type of crime not only threatens financial institutions but also undermines trust in public services and business operations. 

As the methods used by criminals become more sophisticated, traditional detection approaches are struggling to keep pace. In response, artificial intelligence (AI) driven Intelligent Document Processing (IDP) has emerged as a powerful tool, offering advanced, real-time solutions for detecting and preventing document fraud more effectively and efficiently.

How Big A Problem Is Document Fraud?

Document fraud is a growing issue across Europe, with significant cases in sectors like finance, public administration, and international travel. 

In 2023, over 1,900 fraud investigations were active in the EU, leading to estimated damages exceeding €19 billion. Invoice redirection accounts for a number of these cases, with criminals targeting businesses by contacting them with fake payment instructions. The financial, legal, and reputational impacts can devastate organisations, leading to loss of funds, litigation, and damaged credibility.

In Ireland alone, businesses lost close to €10 million last year due to document fraud schemes. According to Niamh Davenport of the Banking and Payments Federation Ireland, the rise of document fraud cases targeting Irish businesses rose by nearly 24% in 2023. 

The types of document fraud used to target businesses and organisations in Ireland and the EU include:

Invoice Redirection Fraud
Fraudsters send fake invoices or payment requests, diverting payments to their accounts.

Fake Vendor/Client Fraud
Criminals pose as legitimate vendors or clients using falsified documents, contracts, or purchase orders.

Payroll Fraud
Forged employee records or manipulated payroll details to syphon funds.

Loan or Credit Fraud
False financial statements or documents submitted to access business loans or credit.

Identity Theft
Using fake business identities or credentials to make fraudulent transactions or access funds.

How Intelligent Document Processing (IDP) Detects Document Fraud

Utilising AI and machine learning to identify patterns and anomalies indicative of fraud, IDP helps tackle document fraud in Ireland and the EU. By automating the analysis of large volumes of documents, IDP identifies patterns such as inconsistent data entries or alterations in document formatting.

IDP can also extract and validate information against known databases, flagging discrepancies in real time. This not only enhances the accuracy of fraud detection but also accelerates the review process, enabling quicker responses to potential fraud attempts.

IDP Step 1 - Document Collection

The first step of IDP involves collecting and automatically classifying various documents that organisations receive and use for verification. This includes:

• proof of identity documents (passports, identity cards, driver’s licence)
• proof of income (payslips, bank statements, tax statements)
• proof of residency (utility bills, mortgage statements)
• proof of payment (invoices, receipts)
• proof of delivery
  
  Using AI, IDP identifies the different types of documents arriving through digital and none digital channels and tags them for relevant processing.
  
  IDP Step 2 - Validating Data
  
  Using pre-defined business rules, IDP has the ability to cross reference data for validation. This includes cross referencing identification data, invoice details and issue dates. By extracting key information, IDP is able to pass or reject documents. Passing those that are rejected or ‘flagged’ on for manual review.
  
  IDP Step 3 - Analysing Authenticity
  
  To verify authenticity, IDP uses AI to analyse the layout, content, and digital features of documents. This analysis looks for the use of fraudulent templates, document reuse, and digital alterations. The AI models learn from each document they assess, adapting to new fraud techniques. Ultimately, these solutions provide risk scores and relevant data, helping organisations make faster decisions.
  
  Intelligent Document Processing (IDP) offers significant advantages for businesses and organisations in Ireland and the EU facing the risk of document fraud. With enhanced accuracy and speed, IDP facilitates rapid decision-making while effectively detecting fraudulent activities. The automation of data extraction leads to cost savings and increased operational efficiency. Moreover, IDP scalability allows organisations to manage growing document volumes without compromising effectiveness, making it a vital tool in the fight against document fraud.
  
  For more information on protecting your business from document fraud book a chat with one of our experts.