Speaking the truth at New Zealand's Internal Revenue Division
New Zealand's Internal Revenue Division has many more customers than the nation has citizens, and one of the reasons for the mismatch is fraud. Voice biometrics are now helping the organisation to fight back.
It’s time to stop making the joke about New Zealand having more sheep than people*.
You should give up the cheap laughs because New Zealand has a more serious ratio to worry about: its population of 4.25 million people has more than 6 million accounts with its taxation office, Internal Revenue Division (IRD).
One legitimate reason for this odd ratio, IRD’s Group Manager, Assistance, Charles Ronaldson, told Sydney’s Voice Leadership Forum in March 2001 is that “businesses and some other entities” need an IRD number. Adding New Zealand’s business population to the human population means more IRD numbers might be acceptable. But he also worried out loud that “not all children are registered for an IRD number”.
Ronaldson also told the forum that IRD is aware it is a target for fraud.
“One individual appeared in court and was quoted as saying he used names and dates of birth to obtain information on 25 people. He then used this to create 103 companies and filed GST returns for all of them, each of which were for refunds.
“The fraud was picked up after $53,000 had been claimed, but was yet to be paid out. The fraudster admitted he had structured this scheme to defraud $2.5 million a year and planned to make claims beneath a threshold at which where we might notice it.
“He also said he chose to defraud IRD because banks were making fraud too hard.” Ronaldson added that criminals are keen to obtain an IRD number because it enables them to perpetrate fraud in other departments, before explaining that the agency is fighting back using voice biometrics.
Speaking the truth
The fraudster who established 103 companies demonstrates why voice biometrics is powerful. “The key thing is that biometrics is based on who you are, not what you know about somebody,” Ronaldson said.
“You can’t change who you are, but you can know a lot about somebody.” That difference, and its potential to reduce the susceptibility of IRD’s many call centre staff to fraudsters, has seen the agency adopt voice-based authentication methods. Voice biometrics involves recording a customer’s voiceprint and then, each time a caller claims to be that customer, comparing their voice to the recording. Specialist software looks for the minute and unique nuances in an individual’s voice and compares the caller and sample in short order, quickly providing an accurate assessment of identity.
IRD’s voice biometrics implementation sees customers offered the chance to speak their IRD number which, at nine digits, is a sufficient sample. Each time these customers call, their live voice is compared to the recording.
“It can be affected by things including background noise, a customer having a cold or flu, or the quality of phone line,” Ronaldson said, before explaining that IRD’s systems take those factors into account and will accept a 95 per cent match as a valid identification. Lesser matches don’t necessarily lock users out, but do mean callers are not permitted to access higher-value services that are more likely to be a target for fraud.
IRD also matches voiceprints to IRD numbers to help detect individuals who have more than one number. “We will be able to run voice identification in the background to see who has multiple IRDs,” he said.
The system will also help to identify those who share IRDs, a common practice among temporary migrant workers. “We have overseas workers come in, they go home, they pass it on to the next person who comes in, who goes home and passes it on to the next person,” Ronaldson said. Voice biometrics will mean this practice becomes far harder, so IRD is proactively collecting voice samples from its customers in order to help reduce fraud for all taxpayers.
Beyond fraud reduction, Ronaldson said IRD has found that the introduction of voice biometrics has helped it to operate a more efficient contact centre.
“We have reduced handling times by an average of 20 seconds a call,” he said.
“We handle four million calls a year, so that mounts up.” The ease of use is also seeing more customers choose self-service options, which frees more resources and has seen contact centre staff able to offer more valuable assistance.
“The level of the calls we are handling now requires a great deal of knowledge,” he said.
Data collected through analysis of the self-service experience is also helping IRD to refine its offerings to make them more effective and more attractive to customers, creating a virtuous circle of continuous improvement.
“Our approach is to eliminate, automate or delegate transactions for the customer so that if they do reach an agent, they really do need to talk to us,” Ronaldson told the Forum. Data from its interactive voice response systems enable that ongoing improvement.
“We are doing a lot of work designing our channels and that is a really key insight,” he added. “For example, we have very harsh penalties that we can impose on people who make late payments. “People want certainty so they are not incurring those charges so we are working hard to ensure people know when they have completed a transaction. We use information the applications generate to make timely decisions and build more intelligence into the organisation. We have lots of data and it’s all about how we use it to build proactive systems, become effective and efficient in the way we work.”.
Ronaldson also said that he hopes IRD’s experience with voice biometrics and selfservice can help other government agencies work more efficiently, especially when customers interact with multiple government entities.
“Customers of one agency are often customers of another,” he told the event.
“New Zealanders want to look at this and see when they deal with IRD they are dealing with government.” That belief means, he feels, that when someone interacts with one agency, government should have the view that they can quickly and easily work with other agencies, too.
“Those that interact with government for immigration very quickly end up at Inland Revenue,” he offered as a scenario in which inter-agency collaboration is important. “There’s a mutual relationship there but we have different authentication processes.” “Sharing biometrics could mean sharing voiceprints between agencies. Ideally, a customer dealing with multiple agencies would be verified with one voiceprint and then deal with all of them without needing to be re-verified.” “That could be really useful.”
New Zealand no longer has 20 sheep for every person. It’s apparently now a far more respectable 10:1 ratio, according to the New Zealand Government's Mythbuster site.
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