Table of Experts Discuss Growing Fraud Threats to Businesses
- The Milwaukee Business Journal hosted a Table of Experts to explore Check Fraud
- While the number of checks has gone down, their individual value has gone up
- A.I. is growing more and more integral to spotting fraud
During the most recent Milwaukee Business Journal’s “Table of Experts” discussion, a group of industry experts gathered to provide their insights on how business can protect themself from fraud. The article notes that, while financial institutions can provide protection for businesses, they will ultimately bear the financial losses.
Each panelist brought expertise from their particular industry -- ranging from banking to manufacturing and commerce -- and it's no surprise that The Milwaukee Business Journal invited Lyneen Fischer, VP of Security at North Shore Bank to discuss the subject of check fraud.
(Image Source: The Milwaukee Business Journal)
Why Check Fraud is a Major Threat to Businesses
As we've noted previously, metro areas such as Milwaukee are heavily targeted by criminals looking to steal paper checks due to the concentration of population and businesses. Panelist Lyneen Fischer highlighted the growing threat of check fraud in today’s business landscape; she noted that, even with the decline of volume, the average value of business checks has nearly doubled -- making them a juicy target for fraudsters.
Fischer explained that check fraud is still rampant; criminals exploit periods of increased payments, such as tax season or after local disasters, to initiate fraud schemes targeting both consumers and contractors. Small businesses should be most concerned, as they tend to pay their vendors with checks.
Fischer went on to emphasize practical safeguards like positive pay with payee match — a tool banks offer to businesses to compare check details before payments are processed, helping block fraudulent transactions. She stressed the importance of discussing anti-fraud solutions with banks to avoid incidents where a check intended for an official recipient (such as the IRS) is illicitly altered and processed for a different payee.
Fischer and other panelists observed that even as businesses increasingly face threats from business email compromise, deepfakes, and social engineering, checks remain the "leader."
The Growing Role of AI for Fraud Detection
The conversation also underscored how artificial intelligence plays a dual role in the fight against check fraud. Fischer noted that AI helps banks quickly detect suspicious check activity and spot anomalies in IP addresses, bolstering defenses against sophisticated fraud attempts.
On the banking side, AI can help detect certain check frauds more quickly. I also see AI helping to identify unusual IP addresses. But AI will also help the bad actors stay one step ahead of us. As a company, you need to protect yourselves through education and reading as much as you can about these things.
Additionally, financial institutions can deploy AI technologies to further protection for themselves and their customers against On-Us and Deposit fraud. These technologies achieve a 95% detection rate by analyzing the transactional data and images of checks to identify indicators of counterfeit, forgeries, and alterations.
With business/commercial accounts typically holding higher amount of funds, business checks will continue to be a favorite target for fraudsters. Businesses will need to maintain vigilance on their payments, while FIs must deploy the right technologies to protect their customers.