News

Is The On-Demand Economy Creating More Security Threats?

With the startup-crazed world taking over today’s headlines, there’s two terms that get tossed around a lot. Sharing economy and on-demand services. There’s just one major red flag of the on-demand economy that raise concerns for vetting employees.

With the startup-crazed world taking over today’s headlines, there’s two terms that get tossed around a lot. Sharing economy and on-demand services.

As a recent Bloomberg piece explores, there’s just one major red flag of the on-demand economy that raises concerns for those in the business world who know the importance of vetting employees. Cutting through the red tape, and overcoming mounds of necessary background checks.

For those who don’t? The burden is heavy — and could come with criminal sanctions, Kate Shoesmith, head of policy at the U.K.’s Recruitment & Employment Confederation, told Bloomberg.

That’s where one startup is trying to cut through the logistics and streamline the process. Onfido, a three-year-old startup based in the U.K., said it can simplify the onboarding process by using technology to vet job candidates without even needing formal paperwork on the applicant’s ID.

Onfido, which pairs up with on-demand services and agencies, can get access to credit checks, criminal records, education records, and even terrorism databases and watch lists. Those checks, of course, are done in real time (in most cases), unless a third party has to be tapped in to assist with more sophisticated checks.

Onfido relies on what it calls its proprietary passport and ID card verification technology to determine the legitimacy of a document. This can even be done remotely using a smartphone camera or webcam. Because if the identity isn’t checked first, there’s the risk that the background check is being done on the wrong person.

“We use machine learning to make sure the system gets smarter with time, finding patterns in documents that are forged or stolen and eliminating human error,” co-founder Eamon Jubbawy told Bloomberg.

But as the sharing economy and on-demand world challenges have proven, sometimes a machine can’t replace a human. After all, there’s been plenty of sophisticated technology innovations that allow cyber hacks to leak through and data to be overlooked.

[bctt tweet=”In the on-demand sharing economy seen today, can a machine always replace a human? “]

Still, there is some optimism among those who have brought Onfido on board to address their background checks. For example, wealth management startup Nutmeg is one of its newest clients and said the startup is saving it time and money.

“We used one of the big three credit bureaus before and would manually check identity documents if necessary. It’s super time-consuming and expensive,” Slava Kremerman, head of strategy at the firm, told Bloomberg. “Onfido is a single vendor for both checks and it’s best in class for both.”

As the on-demand economy grows alongside the demand for real-time data and background checks to be readily available, this market is sure to grow, but there’s going to be one niche that companies need to figure out, Richard Major, a partner at PwC who specializes in financial crime, said in the same piece.

“There are so many of these companies all offering slightly different services,” he said. “The challenge is finding one that integrates with existing onboarding technology while meeting the expectations of the regulator.

“Banks also need stability and long-term viability from vendors,” he added.

That’s where the term “startup” might scare off some companies. But in this cybersecurity-focused world, with the terms “breach” and “hack” flooding headline after headline, the risk is high to those who overlook the importance of strong background checks.

According to the results of the First Advantage 2015 Cybersecurity Survey, people within companies are a huge cybersecurity concern.

The respondents, who represented a variety of professions human resources, risk management and C-suite executives, were questioned about the security controls best equipped to protect companies from cyber attacks and threats.

Nearly 60 percent pointed to employee background screenings as a significant tool for better protecting organizations, while anti-malware services came in as a close second at 53 percent.

“The lack of ongoing, periodic background screening of existing employees that occurs is in stark contrast to its recognized importance by the same organizations,” said Mark Silver, chief security officer at First Advantage.

Close to all of those surveyed (98 percent) said the screening of new employees was at least “somewhat important” in preventing security risks, and 57 percent said it was “extremely important.”

While initial background checks of employees may offer some degree of protection, Silver emphasized the need for ongoing screenings as well.

“The fact is that an initial background check does not protect an organization in perpetuity. In order to better protect against potential insider-driven breaches, periodic rescreening should be done. Fortunately, technology now allows for groups of employees to be rescreened at once – for a fraction of the cost of the original background check,” Silver added.

Earlier this year, a comprehensive survey of cybersecurity professionals pointed to the rising cybersecurity threat that comes from a company’s own workforce.

The Insider Threat Report, released in June, found that 62 percent of respondents said the number of instances surrounding insider threats have increased over the last 12 months. Despite this, the study still found less than 50 percent of organizations have the right controls in place to prevent insider attacks.

These threats are usually posed by privileged users – such as system administrators, database administrators and managers – who have access to sensitive company information.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Financial Invisibles Report

TRENDING RIGHT NOW

To Top