If the prolific use of the word “looting” and the number of results that come up when searching the term “corruption” is anything to go by, fraud and large scale corruption are unfortunately an everyday reality in South Africa, and in many other countries around the world.
It is easy to get despondent about the amount of money that is being used for personal and not public gain, but with advances in cybersecurity and more transparent blockchain technology, “unaccounted for” funds and unforeseen hacks into large corporate databases could become a thing of the past.
Here are some of the ways that innovative technology can assist in more effectively managing the distribution of both public and private funds, and overall monetary and data security:
1. Innovative technology can easily trace the source of a transaction
With blockchain technology, all transactions or “blocks” in the “chain” are irrefutable, which means that it’s much easier to get an idea of where a transaction originated, and where and how the funds were and/or are being distributed.
This means that it is a lot more difficult to transfer funds to an unauthorised source, although the way in which public and private blockchains are managed could limit how accessible these “chains” are.
An interesting way to look at the potential application of blockchain in South Africa (according to economist Jeffrey Dinham) is to think of how blockchain can be used to a) make the distribution of public funds more transparent through a public ledger and b) how blockchain can automate the transferral of funds by setting up certain “checks”.
For example, using blockchain technology, the way in which public funds are spent by government departments could be made accessible with the use of public “keys”, which could be attributed to individual government employees or leaders, which allows anyone to see what transactions are being made by each “key”.
At the same time, blockchain applications can be set up to only allow certain transactions to take place, for example, a predetermined amount of funds can only be transferred to an accredited supplier, otherwise the transaction will automatically be rejected.
There are concerns that this kind of technology is only as good as the foundational governance structures that support it, but with the worrying scope of recent scandals, and the growth of innovative technologies like blockchain, it is clear that there is a way of managing public funds that makes large scale corruption a lot more difficult.
2. Innovative technology can prevent unauthorised access
When it comes to cybersecurity, more advanced artificial intelligence (AI) applications can also more effectively track online activity to make sure that funds and the systems that secure them are secure themselves.
To put it simply, AI allows for the more efficient processing of financial data, which means that patterns can be easily detected with the use of an AI application. This pattern detection is then continuously improved with the ongoing input of data (i.e. machine learning).
Overall, this kind of process takes a the kind of deep understanding of mathematics that is impossible to go into here, but by setting up these kind of automated processes, it is a lot easier to keep track of volumes of data, and funds, which means that anomalies are much easier to track.
For example, using an AI application, a bank can monitor all of the activity that goes on in a banking application (i.e. who is logging into which accounts and when, or trying to). By monitoring this data over time, the application can detect malicious activity and develop ways to determine which banking profiles or accounts are most at risk by analysing trends. By doing this, cybersecurity systems can also evolve and be continuously improved upon.
How will anti-fraud and corruption applications evolve in the future?
If you think about the combination of AI and blockchain technology, there is vast potential to set up the kinds of automatic transactions and tracking systems that could intercept corruption and fraud in a way that doesn’t rely on human intervention (which is prone to persuasion and error).
Obviously, privacy is always a concern when it comes to monitoring and evaluating data, but it’s encouraging to know that the development of technology that can improve the security and the distribution of money is being prioritised. This is because at the end of the day, the security of both private and public funds affects us all, and is so important in maintaining the stability of the global economic system, imperfect as it may be.
At SovTech, we’re passionate about developing secure and reliable technology applications for growing businesses. Get in touch with us to find out more about the variety of software applications that we can build for you.