2011 Fraud Trends – 3 Key Takeaways

At year’s end, I like to take a step back and assess the main fraud trends I’ve seen and heard when speaking with our customers. Not only have we seen a lot of movement in the ACH area due to the FFIEC Supplement released this year, but there also have been some major events in the news this year that have driven action in fraud prevention measures overall. There are a few trends, in particular, that stand out to me more than others.

1. Internal Fraud is Here to Stay: The interest in Internal Fraud continues to be high, and without a proactive monitoring system in place, banks are at higher risk of being exposed to theft from their own employees. Some of the more common fraud strategies in Internal Fraud include employee self-dealing, collusion, and unusual account maintenance and inquiry activity. Fraud monitoring doesn’t need to be limited to suspicious financial transactions — identifying questionable non-dollar transaction activity is an effective method for catching the fraud before it occurs, and identifying fraudsters interested in stealing information.

2. ATM Monitoring on the Rise: Debit card fraud continues to be an issue, and banks are keeping a closer watch not just on ATM withdrawals, but on card requests. It is important to get an early read on potential fraud, and identify the point of compromise, in order to warn other cardholders who may be at risk. In addition, there are a series of preventive scenarios around new card requests, which can help identify Debit Card fraud before the ATM transaction even takes place.

3. Cross-Channel Fraud Monitoring is Critical: An excellent strategy for cross-channel fraud is simply to identify related alerts. This provides fraud analysts and investigators with visibility into all the alerts that share common information and point to a customer being victimized by one perpetrator, or a ring committing fraud in a variety of ways. Automating the process of identifying alerts that share account numbers, customer numbers, or employee I.D.’s streamlines the decision process and makes it easier for investigators to build their case.

I wonder… Does your organization agree with this assessment?

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