Welcome to the first in a series of posts exploring payments fraud, with an emphasis on check fraud detection. This informative blog series approaches this crucial topic in the following ways:
- Exploring concepts and recommendations to improve check fraud detection and mitigate financial crimes
- Reviewing and recommending the most relevant articles on the topic
- Examining the impact of technologies such as image analysis, AI, machine learning, and self learning
The relationship between payment fraud & “legacy check”
Fraudsters continuously look for opportunities to exploit fraud control systems. Even in the past three years, we have seen significant shifts in payment fraud & financial crimes as a by-product of banks deploying different types of fraud control. For example:
- Credit card fraud was running wild. The industry implemented EMV. Is it working?
- Identity theft incidences may have plateaued, but losses are increasing. (See numbers from Consumer Sentinel Network, FTC)
- Check fraud was declining for 10 years due to faster clearing and controls. But the Terminator always returns. (“I’ll be back“)
With that in mind, the question now is: Are you considering scenarios where the fraudulent money transfer involves a check?
With 15.5B+ checks written each year, check fraud detection is one of the most common problems we hear from banks today. Why?
- Simply put, fraud is growing again. At the OrboGraph Tech Conference, AITE indicated that 96% of the respondents disagreed with the following statement, “Check fraud is declining annually in my institution.”
- The Federal Reserve actually calls out check safety as “low” compared to other payment methods. And we’re not just talking about personal checks — corporations are ripe targets as well.
- The omnichannel has diversified with fraud opportunities in mobile, at the ATM and still across the teller line.
It’s time for integrated, real-time, image-based detection
Few banks have actually modernized their check fraud operation comprehensively. Some are still running 30 year-old technology while others are running only batch-based transactional analysis. That’s not enough when you consider the dynamics of counterfeits, forgeries, and alterations!
As a “Top 10 Financial Fraud Detection Solutions Providers 2019” listed by CFO Tech Outlook Magazine, OrboGraph will help identify the benefits of image analysis, AI, machine learning, and self-learning which mitigate fraud risk and financial crimes involving the check.
We hope you enjoy the publication and the benefits from this series!