ICBA Podcast: Community Banks Addressing Check Fraud Challenges
- Check fraud is emerging as a huge problem
- Many vendors are bringing back older technologies to fight fraud
- "...They're blowing the dust off their 20- and 30-year old pieces of software and coming back out and saying, 'I've got some check fraud solutions!'"
Scott Anchin, VP, operational risk and payments policy at ICBA, and David Long, Bryant Bank’s executive vice president, correspondent banking/capital markets, joined Charles Potts, host of the Independent Bank Podcast, to talk about some of the breakthrough efforts and approaches being applied to the growing problem.
The Podcast opens with a question by host Charlie Potts:
Who thought in 2024 we'd be talking about this [check fraud]? While this threat seems out of place in a world where cyber tax and data breachers grab all the headlines, in our industry, it's become a significant concern, especially post-pandemic, and it continues to grow in prominence today. According to the Association for Financial Professionals in their 2024 AFP Payments Fraud and Control Survey Report, 65% of surveyed respondents reported experiencing check fraud within their organizations.
Mr. Anchin notes three primary reasons for the uptick in check fraud:
- Increased opportunities and motivation for fraudsters
- Technology is inexpensive and readily available
- Check tech has inherent vulnerability and is fairly antiquated
Other key takeaways from the conversation:
- Education is important. Banks need to ensure their customers are equipped to be vigilant.
- The ICBA is actively tackling the problem. “The one advantage that we have—which is a really, really strong advantage—is that we have an incredibly dedicated and engaged membership of folks who are working on the frontlines of check fraud, understand the problem, and are ready to really roll up their sleeves and dive in and tackle the challenge head on,” says Scott Anchin, VP, operational risk and payments policy at ICBA.
- The ICBA recently launched the Community Bank Check Fraud Task Force, consisting of more than 40 banks and associations.
- ICBA has posted a handy check fraud guide, available for download now.
- Visit Checkfraud@icba.org to discuss with ICBA and group.
Check Fraud Technology Outdated?
During the podcast, an interesting topic was debated regarding the technological perspective of combatting check fraud. Host Charlie Potts joked, "It is like the vendors have looked at this and they're blowing the dust off their 20- and 30-year old pieces of software and coming back out and saying, 'I've got some check fraud solutions!'" Mr. Long responded with, "You're so right..."
From an industry perspective, there are some vendors who have seen the market shift and indeed brought their older technologies back into the spotlight to get a piece of the "check fraud detection market." These include many technology companies who continue to boast about how Positive Pay is the key technology for stopping check fraud.
However, this is not the case for vendors like OrboGraph, who have been continuously developing their technology for decades, even before the check fraud boom emerged since the pandemic. OrboGraph introduced its AI technology for check processing, automation and check fraud detection back in 2018. OrboGraph has since furthered its check fraud detection technology with the launch of its innovative OrbNet Forensic AI technology in 2021. OrboGraph has been committed to its focus on checks for 29 years and continues to innovate our technologies vs. repurposing decades old technology.
The end of check fraud is nowhere in sight. Fortunately, banks can be confident that there are vendors like OrboGraph out there providing the technology and solutions they need.