How Systech Ltd Embedded a Selfie Identity Verification Technology in FundMaster to Help Kenya Railways Staff Retirement Benefit Scheme Reduce Fraud and Streamline Pensioners Management

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Introduction

With the increasing adoption of software technology in pension management and administration in Africa, many pension schemes face a new challenge: ensuring the security of their pension systems. The threat of cybercrime looms large, with fraudsters exploiting vulnerabilities in pension systems and causing losses amounting to millions of shillings. One of the most common types of fraud involves hacking systems to divert benefits payments to the wrong people among other pensioner impersonation tricks aimed at deceiving schemes into making payments to false beneficiaries.

The Kenya Railways Staff Retirement Benefit Scheme (KRSRBS) is an entity within the Kenya Railways Corporation responsible for administering pensions for railway workers. The scheme had been facing challenges with managing its pensioners due to an increasing cost of managing the certificate of existence of its retired members – over 7000 pensioners. KRSRBS approached Systech Ltd, a leading pensions software development company in Africa, for a solution. Systech suggested integrating a selfie authentication application into FundMaster Pension Administration System (KRSRBS has been using FundMaster for 15 plus years now) to verify the identity of pensioners and reduce fraudulent activities.

This case study describes how Systech successfully integrated the selfie authentication application into FundMaster, resulting in a streamlined pensioner management process and a significant reduction in cost and fraudulent activities.

Challenge

The Kenya Railways scheme had been facing challenges in managing its pensioners due the large number of pensioners and their geographical distribution all over the country. The pensioners had to be identified and verified manually, which was time-consuming and prone to manipulation. The scheme management was looking for a solution that would enable them to verify the identity of pensioners quickly and accurately while reducing the cost for both members and scheme and also curtail any incidence of fraudulent activities.

Solution

Systech Ltd proposed integrating a selfie authentication application into FundMaster – a software product that KRSRBS has been using to run their scheme for more than 15 years to date. The selfie authentication application uses facial recognition technology to verify the identity of pensioners quickly and accurately. Systech Ltd integrated the selfie authentication application seamlessly into FundMaster, ensuring that pensioners could be validated easily and quickly.

The system was configured to capture pensioner details, including a pre-existing photo, which could be used to authenticate the pensioner when a selfie is taken. The selfie authentication application compares the selfie to the pre-existing photo to determine whether the pensioner is genuine. This piece of biometric data is managed in FundMaster component known as the certificate of existence register. Apart from the core system, this technology is integrated in the members self-service portal allowing pensioners to undertake the annual selfie reverification process by themselves from the comfort of their homes – this is because a certificate of existence census is done annually.

Results

The integration of the selfie authentication application into FundMaster has had a significant impact on the KRSRBS pensioner management process. The following are among the outstanding realizations:

1. Streamlined Pensioner Management Process: The scheme can now verify the identity of pensioners quickly and accurately, which has streamlined the pensioner management process. Pensioners can now authenticate themselves using a selfie, which takes less time compared to the manual process, which took several minutes per pensioner.
2. Reduction in Fraudulent Activities: The selfie authentication application has significantly reduced the incidence of fraudulent activities, such as pensioners claiming to be someone else. The application compares the selfie to the pre-existing photo to ensure that the pensioner is genuine. As a result, the scheme has been able to reduce fraudulent activities significantly, saving time and money.
3. Increased Pensioner Satisfaction: Pensioners can now authenticate themselves easily and quickly, which has increased their satisfaction with the pension management process. Pensioners no longer need to go through the manual authentication process, which was time-consuming and prone to errors.

Quantitatively, the selfie authentication procedure has successfully validated more than 6,000 pensioners, who are now awaiting the next cycle of re-verification. The next cycle of selfie verification is expected to eliminate all current fraudulent beneficiaries from the pension scheme. This step is estimated to reduce the losses incurred through incorrect payments by up to 70%.

Other Benefits

In addition to streamlining the pensioner management process and reducing fraudulent activities, in FundMaster Xe – the latest version – Kenya Railways continues to enjoy other benefits such as:

1. Efficient Pension Payments: FundMaster is designed to integrated with any banking system that pension schemes subscribe to. FundMaster also allows payments to be made through various digital platforms such as Mpesa and Airtel money. From a separate Accounts Module, the system ensures that the verified pension amounts are paid to the genuine beneficiaries on time, cutting delays and inconveniences.
2. Modularized Pensioners Management: FundMaster is a module-based pension administration system. This has enabled the scheme to manage its pensioners from a separate module known as Pensioners Module. This design approach has helped to eliminate duplication of efforts and to manage its resources more efficiently.
3. Real-time Data: FundMaster provides real-time data on the scheme’s properties (the schemes main assets), enabling the scheme management to make informed decisions about investments. The system also provides a single view of pensioner data, including their pension status, payment history, and personal details allowing quick analysis of data via the reporting module in FundMaster.

Conclusion

Systech Ltd integration of the selfie authentication application into FundMaster has had a significant impact on the KRSRBS ‘s pensioner management process. The solution has streamlined the pensioner management process, reduced fraudulent activities, and increased pensioner satisfaction. The scheme is now able to manage its pensioners more efficiently and effectively, and it can continue to provide quality pension services to its beneficiaries.

Finally, FundMaster ability to integrate with selfie authentication applications is beneficially to all its clients. The following are a sample of the benefits that awaits our clients who ready to incorporate this piece of technology into FundMaster:

1. Increased Security: The selfie authentication application adds an extra layer of security to the pension scheme’s authentication process, making it more difficult for fraudsters to impersonate pensioners and claim benefits.
2. Improved Efficiency: The FundMaster software automates the onboarding of pension members through the selfie authentication process, reducing the need for manual intervention. This results in faster processing times, elimination of fraudsters, and increased efficiency.
3. Cost Savings: By automating processes and reducing errors, pension schemes can save money on administrative costs, such as paper, printing, and staffing.
4. Better Transparency: The FundMaster software provides real-time data and analytics of the pensioners enabling pension scheme administrators to make informed decisions and better manage their schemes.
5. Improved Pensioner Experience: The selfie authentication application is user-friendly and convenient for pensioners. It eliminates the need for pensioners to physically visit pension offices, making it easier for them to access their benefits.

Overall, FundMaster with the selfie authentication application can help pension schemes in Africa improve their security, efficiency, transparency, and cost-effectiveness while providing a better experience for pensioners.