BM Technologies unveils new identity verification service to combat enrollment fraud in higher education

BM Technologies (BMTX) has introduced its new identity verification service, BMTX Identity Verification (IDV), addressing the increasing issue of enrollment fraud in higher education. 

The service is designed to protect colleges and universities from the financial and operational damage caused by fraudulent student applications. It will also help institutions streamline their enrollment processes and maintain the integrity of their academic systems.

A growing challenge for higher education

Enrollment fraud has become a serious issue, especially for community colleges in the USA. These institutions often have open enrollment policies and no application fees, making them vulnerable to “ghost student” applications. 

Fraudulent applications can lead to significant financial losses, as schools pay out financial aid to students who do not exist and allocate resources to support these fake enrollments. The misallocation of resources can also impact legitimate students, leading to unnecessary expansions in course offerings and strained budgets.

Jamie Donahue, President and CTO of BMTX, highlighted the importance of the new service: 

“We are proud to introduce BMTX Identity Verification (IDV) to both our existing higher education school partners, as well as the colleges and universities we don’t currently partner with. BMTX IDV leverages cutting-edge technology to combat student enrollment fraud, providing institutions with a secure and efficient solution."

BMTX IDV uses advanced artificial intelligence (AI) and machine learning tools to detect and prevent fraudulent activities during the enrollment process. 

According to the company, the system can reduce fraud rates by 85% compared to traditional methods and lower third-party and synthetic identity fraud by up to 95%. 

Early adoption and results

Since the start of 2024, BMTX has signed contracts with 17 institutions for the new IDV service. These institutions include the San Mateo Community College District and the Louisiana Community and Technical College System. BMTX is also set to provide IDV services to the Wisconsin Technical College System.

Speaking exclusively to ETIH Brian Suponcic, Senior Vice President of Sales and Client said:

 “Our commitment to safeguarding higher education institutions goes beyond simply providing a service. The BMTX Identity Verification (IDV) solution empowers schools to confidently address enrollment fraud while maintaining focus on their mission to provide quality education. This innovative tool ensures that resources meant for legitimate students are protected, creating a more equitable and secure academic environment.”