Continuing the Conversation from The ABA Risk Management Forum
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The ABA Risk Management Forum was held last week in Denver, Colorado, and I was glad to be in attendance and have the opportunity to present on the topic of deposit account fraud. The forum offered numerous educational sessions for financial institution employees as well as several great networking events.
Session topics covered during the forum included: implementing Dodd Frank; new risks in ATM security; cloud computing; and several other hot topics. To me, this event is one of the best annual industry events for community banks, and I am sure the larger banks in attendance were satisfied with the content as well.
In my session, Strategies to Reduce Deposit Account Fraud Losses and Budgets, the emphasis was on leading edge technologies that have the ability to dramatically reduce false positives while detecting additional fraud. In the area of check fraud alone, dramatic false positive reduction can have a significant impact on the fraud prevention budget (and operational efficiency) while further enhancing departmental results through lowered losses. Many banks I talked to are still using check fraud solutions they implemented 15 or 20 years ago. Think about the significant advances in technology during that time. I mean, could you imagine using a fifteen-year-old computer on a daily basis? When you think how far software has advanced in the past 10 years even, it is hard to believe that decade-old fraud management systems are still being used by many of the country’s largest banks.
New approaches for detecting fraud have come a long way. Consider the power of advanced analytics compared with the older, less sophisticated fraud prevention systems. Superior analytics are the key to identifying and scoring higher-risk transactions and lowering the instances of false positives. Newer analytic models provide the accuracy to truly identify fraudulent transactions on which prevention analysts need to focus. False positives are a resource drain and lead to high levels of frustration for analysts. Reducing these, I strongly believe, will lead to more job satisfaction for analysts who tend to feel a personal stake in finding and preventing fraud every day.
As always I enjoyed my conversations with the bankers on the front lines of fighting fraud and hope we can continue the dialog. Also, if you would like a copy of my presentation, please leave a comment and I will send it to you.
Posted in:
Deposit Account Fraud
Check Fraud
New Account Fraud