Is Check Fraud Quietly Burning Out Your Best People?
- Constant check fraud “firefighting” drains energy and focus from your best people.
- Manual reviews, fragmented systems, and rising fraud volumes create chronic backlogs and stress.
- Without better tools and training, burnout accelerates, risking turnover and institutional knowledge loss.
Community banks are known for their employees. The teller who recognizes a customer at the grocery store. The bank manager who understand the needs of the local businesses. And, the operations specialist who “just knows” when a transaction looks off.
In a recent post, “Reclaiming the Bank: Why Check Fraud is Your Team’s Silent Talent Killer,” the Independent Community Bankers’ Bank (ICBB) shines a spotlight on a problem that many financial institutions are feeling, but not always naming: check fraud is slowly wearing down the very teams that keep everything moving.
ICBB describes a familiar picture for community banks: there are growing check fraud attempts fueled by mail theft, check washing, and high‑quality counterfeits, yet most of the attention is focused on digital scams. The first impact isn’t always a big loss; it’s the expanding exception queue and the overtime needed to clear it.
Day after day, operations and fraud staff log into legacy systems and face a wall of exceptions under tight “pay or return” deadlines. Highly skilled employees spend the majority of their time clicking through images, clearing false positives generated by rigid rules. When a fraudulent item does get through, they are hit again with disputes, affidavits, provisional credits, and reconciliation work.
The result, as ICBB notes, is a “silent talent killer," triggering chronic stress, shrinking job satisfaction, and ultimately turnover among some of the institution’s most experienced people.
Hiring More Personnel Won't Solve the Problem
ICBB points out that simply adding staff is no longer realistic. It's difficult to recruit people into roles dominated by repetitive manual review, and fraud volumes are rising faster than headcount can.
Additionally, there is a problem that ALL financial institutions face: a steady drain of institutional knowledge on checks. Many check experts have spent the past three to four decades gaining knowledge of the payment -- learning through experience and spending countless hours understanding the regulations to properly handle returns and adjustments. Experts that financial institutions relied upon are now heading towards retirement or have already, leaving a massive gap of knowledge.
Furthermore, a number of financial institutions are buying into the mistaken sentiment that "checks are dead," and consequently putting fewer resources toward training employees on checks, exacerbating the issue.
Can Technology Make Up the Shortfall in Personnel and Institutional Knowledge?
The article notes that the benefits from modernizing fraud strategies and technologies is "two-fold":
- Reduction financial losses and lower overhead
- Improvement to employee morale
Technologies like OrboGraph's Anywhere On-us Fraud and Anywhere Deposit Fraud were developed to achieve these results for financial institutions. Utilizing a multi-technology framework, a check transaction is able to detect over 95% of counterfeits, forgeries, and alterations. This enables financial institutions to not only detect more fraud, but also reduce the number of items needed to be reviewed by their fraud teams.
But, what about the institutional knowledge gap issue? This is a challenge that industry associations are tackling. For instance, at the most recent Clearing House/ECCHO Operations Committee meeting, experts from financial institutions and vendors—including OrboGraph—discussed the issue while working in groups to identify solutions.
While nothing can replace experience on the job, financial institutions can fill the gaps by enabling their employees to gain knowledge through certifications like the National Check Professional certification offered by ECCHO. Furthermore, during the meeting OrboGraph's Marketing Manager and Fraud Detection Specialist James Bi suggested that AI can be leveraged to address the knowledge gap—noting that vendors have trained AI on the NACHA rules and regulations.
"The latest generation(s) grew up 'Googling' everything. Even today, when younger employees need to understand a concept or find solutions, they turn to search engines and AI to find the solution. So, why not use these tools to handle adjustments, returns, and anything check fraud? While the rules and regulations governing checks span across multiple regulations like UCC, Reg CC, etc., there is no reason that we as an industry cannot train AI to provide guidance or at least point out regulations that directly apply to a certain case."
AI's potential use cases are vast. The onus is on our industry to identify these opportunities and leverage AI to combat challenges like check fraud.