With the unprecedented rise in fraudulent activity financial institutions and their customers experience, the pressure for risk mitigation to reduce losses and protect FI brands is extreme across all payment channels. Fraudsters are more sophisticated and determined than ever, with new tools and technologies that challenge the banking system every day.  

One type of payments fraud, check fraud, has undergone steady transformation. As  check deposit behavior shifts from in-branch to remote channels, the need for financial institutions to protect themselves and their customers against fraudulent activity is key.  

To learn more about the challenges financial institutions face today as they continue to search for ways to mitigate risk, PaymentsJournal sat with Bev Nichols, Product Director of Deposit Solutions at Fiserv, and Sarah Grotta, Director of Debit and Alternative Products Advisory Service at Mercator Advisory Group. 

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Check Challenges 

Check fraud schemes have evolved and adapted to the greater adoption of digital deposit, which was often the only deposit method available during the pandemic. “[Mobile deposit] has now basically become a standard,” said Nichols, “but as we [made that transition], we came across risk challenges.” The AFP report showed that 66% of respondents believe checks to be one of the most susceptible methods of payments fraud. 

“We often forget just how often we do write checks,” added Grotta. “FIs are investing in their digital transformation, but there hasn’t necessarily been enough investment in activities to support checks.” Consumers and businesses are still writing billions of checks equaling trillions of dollars annually. Banks, credit unions, and their clients and members need fraud prevention that extends beyond manual efforts from overextended FI staff. 

How FIs Can Protect Accountholders (and Themselves) Against Fraudsters 

Marketplace solutions to fraud must align with the modern expectation for speed,