While most of us focus on the screens and emails, it sometimes becomes difficult to visualize just how much we depend on documentation. From physical documents couriered across the globe to scanned PDFs mailed here & there – the trail of documents that make our businesses run is surprisingly complicated.
The problem that ripples from the lack of visibility and traceability of the documents we are working on leads to security issues. For example, while receiving and sending critical documents like contracts, invoices, requests for proposals, chances of document getting tampered is high, which could cost your business and credibility. How do we ensure that the original document reaches the recipient without getting tampered with?
Understanding the Risks of Tampered Documents
Document tampering is a real challenge that has already flooded several global networks. From government bodies to private enterprises, most of us are operating very close to a tampered or fraudulent document, without knowing the exact extent of such crime. Here is how the landscape of tampered and fraudulent documentation is panning out.
Document Tampering Data in a Developed Economy
Common Types of Document Tampering
1. Supplier Fraud
A common form of fraud is the tampering of documents at the hands of the suppliers. The smaller businesses that are directly interfacing with suppliers often have relationships that have lasted years. While their processes might be inefficient, they can still manage to handle each document manually and to some extent identify tampered collaterals.
The larger enterprises which have a large cohort of suppliers are the ones at higher risk. From invoices to agreed pricing to delivery dates – a sophisticated supplier can make small changes across a large set of documents for years without raising any red flags.
2. Customer Fraud: Credit Risk and Liquidity Concerns
Supplier fraud generally leads to suboptimal cashflows as the accounted and actual projections do not match. If the firm has robust accounting systems, it will be able to detect the misdemeanour sometime soon. Customer fraud can be much more stinging as it targets the companies P&L directly.
Suppose you are supplying heavy machinery to a major corporation. The company is a privately held entity and has had a reputation in the market for paying in time. It has recently raised a ton of debt, but the data is not made public since it is a private company. The company is facing extreme financial stress. And just then, you offer the company comfortable credit limits – allowing them to buy now and pay later. You make the decision based on your understanding of the tampered financial documents they have presented. Without even knowing, you have become a distressed creditor and now face counterparty risk.
The risk gets exacerbated if you are also operating on credit from your suppliers. And all of this comes at the behest of some tampered documents.
3. Compliance Challenges
Even after tampered documents have been discovered in your supplier or customer network, the question is – how do you deal with it? If you approach the courts and hire a lawyer, it will add to your overheads. At the same time, you now have to invest in better systems that can detect such frauds.
4. Employee Fraud
Employee fraud can have wide-ranging consequences. From money laundering to siphoning funds to identity fraud – the range is nearly limitless. Since the origin of such fraud is present within your company, the damage can be more direct and go unnoticed for a long period.
Blockchain Against Tampering: Tamper Evident vs. Tamper Proof
Blockchain can and should be considered a potential and evident solution in shielding businesses and government processes against document tampering. A blockchain network uses a distributed ledger system to record transaction data with timestamps and in chronological order. To tamper with such data, the attacker will have to change the information across all the ledgers – all the way back to the very first block.
1. Are Blockchain Networks Tamper Proof?
Blockchain networks do not have a central authority like a bank or a government agency regulating the transactions. The entire premise rests on the fact that to tamper data in ledgers, the attacker will have to change subsequent data in all predecessor ledgers – making it theoretically impossible to make systematic changes, even with a large set of computational resources.
The problem is – what if the data recorded in the ledger is fraudulent? If the attacker can pose a cybersecurity threat to the node where principal data is created by adding fraudulent data, the blockchain network’s security gets compromised, even if the system is functioning exactly the way it should.
The real question, then, should be – are blockchain networks tamper-proof or tamper-evident?
2. Tamper-Proof vs. Tamper-Evident Blockchain Networks
Tamper-Proof blockchain networks will ensure that there is no theoretical evidence of tampering with any data in the ledgers. While that makes sense, an additional layer of security can be created with tamper-evident blockchain networks.
In a nutshell, businesses are not interested in just the data but also in examining the integrity of the data. Tamper-Evident blockchain networks will assign unique identities to data-points, and as soon as a change is made – flag it. Then, the decision-makers using the Blockchain can see whether the change is required or an attempt to tamper with the documents/data.
Creating Tamper-Proof Documents with Blockchain
Blockchain, paired with robust cybersecurity measures, can be used to create tamper-proof documentation processes. Here is how this can unfold:
1. How Does Blockchain Make Your Documents Tamper-Proof?
By productizing blockchain technology it becomes feasible to have customizable blockchain solutions to overcome document fraud. For example, ProofEasy provide you with a unique QR Code.
VeriDoc Global is one of the pioneers in making Blockchain accessible to businesses of all scales and sizes. It uses a unique hashing technology for each document stored on client serves and access with an API, along with a distributed ledger network – i.e., a Blockchain network. The documentation process hence becomes immutable, incorruptible, and removes any points of failure.
2. Benefits of Tamper-Proofing Documents:
1. Lower costs for a more robust compliance system
2. Streamlined due-diligence processes
3. Timely flagging of suspicious edits
4. Increased data integrity
5. The lowered risk to business continuity
6. Improved financial health with avoided counterparty risks
In Conclusion
Document tampering and fraud can lead to a series of challenges for individuals, businesses, and government agencies. It leads to excessive counterparty risk in the system, increased compliance costs, and poses a major threat to business continuity. With Blockchain technology platforms like VeriDoc and ProofEasy, businesses can leverage Blockchain to get tamper-proof documentation at scale.
