Insights CSI Digital (1) - Flipbook - Page 3
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Payments Fraud on the Rise
Source: Department of the Treasury’s Financial Crimes Enforcement Net work
Check fraud
Card fraud
ACH fraud
Account takeover
500,000
400,000
reduced fraud at physical points of sale.
It shows additional promise for mitigating card-not-present fraud, Herren says.
300,000
Banks can also look beyond traditional
methods of customer validation, using
200,000
tactics such as keystroke dynamics.
“Everything that [a] customer does
is captured and compared against their
100,000
normal behavior,” he says. “It allows us to
create friction when appropriate.”
Working with CSI, The Cecilian Bank
0
2014
2015
2016
2017
2018
2019
2020
2021
2022
adopted a real-time denial system that
declines fraudulent transactions as they
occur. Burks says this system has helped
cut down on fraud.
Technology alone cannot stop all fraud;
which is antithetical to a positive custom-
Americans use checks these days, old-
mitigation and prevention efforts should
er experience. To keep customers happy,
fashioned check fraud has soared. In-
include a human component. That means
bankers need to strike a balance between
creasingly, thieves are stealing checks out
banks need to educate consumers and
fraud prevention and customer experi-
of the mail, altering them and then taking
continuously train staff, particularly
ence, says Matt Herren, director of pay-
advantage of the time it takes for a check
frontline employees who are most likely
ments services at CSI, a financial software
to be deposited at one institution and
to intercept fraud attempts.
and technology firm.
discovered as fraudulent by the originat-
“If I’m looking at my fraud losses, I need
to not only control for risk, but I need to
ing bank.
EMV chips reduced the incidence of
“With any product, you have to really make sure that you can dedicate
the human resources to it,” Burks says.
control for experience as well,” he says.
card fraud at physical points of sale, but
“Otherwise, it just sits there and costs you
“I need to be looking at, ‘How do I get the
card-not-present fraud spiked across
money, and you’re not using it.”
best possible experience for my clients at
digital channels in response, as bad ac-
an acceptable level of loss?’”
tors used stolen card credentials to make
Payments fraud has multiplied over
the past decade, both in type and preva-
fraudulent purchases online.
This dynamic in particular illustrates
Bank leaders may also find strength in
numbers when it comes to fighting fraud.
In choosing a technology vendor, bankers could consider looking for one that
lence. According to the Department of the
the weaknesses of static credentials.
works with large groups of banks and
Treasury’s Financial Crimes Enforcement
“When a piece of information doesn’t
credit card companies. That vendor will
Network, depository institutions filed
change, it’s almost inevitable that it will
have a bird’s-eye view of what’s going on
269,693 suspicious activity reports related
eventually be used in some form or fash-
across the fraud landscape.
to credit or debit card fraud in 2022, the
ion for fraud purposes,” Herren says.
latest data available from the agency. That
represents a 257% increase since 2014.
More recently, banks have confronted
fraud and scams in person-to-person
“Banks aren’t going to be able to do this
alone,” Herren says. “The goal is really to
have partners who have their software
Strength in Numbers
Dynamic encryption, which uses to-
on 40%, 60%, 70% of devices out there,
so [banks] can leverage not only the data
payment channels, like Venmo, CashApp
kenization to assign a different data value
that they’re giving us, but also data from
or Zelle. And despite the fact that fewer
to each transaction, has dramatically
other organizations.”
