A Community Against Fraud

Recently a group of bankers got together for the Memento Bank Fraud Peer Bank Forum as a community against fraud to discuss and share strategies for improving fraud prevention at their respective institutions. I’ve had the pleasure of participating and hosting a few of these events, and for me there is no substitute for the types of discussion that always seem to happen when a group of passionate, determined individuals get together to compare notes and share perspectives on improving fraud prevention. Here are a couple of my takeaways from the meeting.

• A wide range of institutions attended the forum - underscoring the pervasiveness of the fraud threat facing all banks and credit unions. There is no institution immune from fraud and increasingly the fraud crosshairs are being focused on small to medium sized institutions.

• Existing fraud threats are diverse and affect both payment types and the delivery channels financial institutions use to offer products and services. As an example, the group spoke at length about the current Account Takeover and subsequent ACH and Wire payment fraud. With this threat, accounts are compromised in the online channel but the fraud becomes a loss when money is moved via ACH or Wire from the attacked account.

• Speaking of multiple delivery channels and payment types, cross-channel fraud was a dominant theme of the forum. Siloed business units, diverse products, and a host of other reasons continue to challenge the ability of a financial institution to get a holistic view of a customer account. Solutions to this problem are not easy – alert management, case management and a single platform providing an enterprise fraud management solution were all discussed.

• The recent coverage of the draft FFIEC guidance was a hot topic and generated significant discussion. Some felt the guidance could help bolster a business case and increase investment although this wasn’t universal. Overall, the consensus was that more needed to be done to protect against ACH and Wire fraud. But as one participant put it, “we don’t need updated guidance to tell us what needs to be done”.

• Last but not least, improving communication was a central theme of the forum. A number of financial institutions described positive results from more communication between the loss prevention, information security, information technology and marketing departments. The benefits of communication clearly extend both internally and externally.

Thanks to everyone that participated in the forum. As always, I look forward to the next event. 

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