Financial fraud continues to plague banks and credit unions, impacting both their reputation and their bottom line. Nearly 60% of banks and credit unions lost more than $500K in direct fraud losses in 2023.
Your financial institution likely has fraud detection tools like positive pay integrated into your digital banking platform, but in many cases, these basic tools lack the means to detect fraud and notify you in real time. And in the case of an instantaneous transaction such as a wire transfer, you may struggle to recover any funds affected by fraud.
If you haven’t updated your policies and processes recently, your strategy may need a refresh. New tools and resources — such as AI and machine learning technology — can help detect fraud much more effectively, before funds leave your financial institution. And when you can detect fraud proactively, you can cut your fraud losses in half.
One way to bolster your fraud strategy is by establishing a robust fraud prevention program. Steps to build your strategy include:
- Conducting a risk assessment to identify potential threats and vulnerabilities
- Identifying technology to detect fraud and notify you in real-time
- Implementing plans and processes for preventing fraud and responding quickly if fraud does occur
- Integrating fraud prevention into your company culture and organizational structure
Enacting a proactive fraud strategy allows your institution to move out of reactive mode and stay ahead of emerging threats. Learn details about building a proactive fraud strategy, as well as how a proactive strategy can benefit your institution, in our white paper, Defray the Rising Cost of Fraud with a Proactive Approach.
