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If you're reading this, chances are you're probably worried about the rise of check fraud impacting your credit union. And with good reason—check fraud is a serious threat that can result in significant financial losses and damage your reputation. Fortunately, there are ways to stay ahead of the curve and protect yourself and members from this type of fraud. So, grab a cup of coffee and let's dive in.
Check fraud can take many different forms, including forged or counterfeit checks, altered checks, and fraudulent check deposits. Current check fraud trends you should be aware of include:
Traditional fraud prevention strategies for check fraud, such as manual check verification and signature verification, are time-consuming, expensive, and unreliable. Fraudsters can easily circumvent these methods—more now than ever with the rising use of artificial intelligence (AI) image tools like Midjourney. As a result, credit unions need to employ real-time fraud prevention strategies to stay ahead of these schemes.
Real-time fraud prevention uses AI and machine learning to detect and prevent fraudulent transactions as they occur by analyzing massive volumes of data in real-time to identify patterns and anomalies that may indicate fraudulent activity. Real-time fraud prevention can also incorporate risk scoring and decision-making tools to evaluate the risk of individual transactions and automatically approve or decline transactions based on predetermined risk thresholds.
Real-time fraud prevention offers many benefits for credit unions, including:
To close, yes, check fraud is still here—and still prominent. By reinventing their fraud detection strategies with AI and machine learning, credit unions can check all their boxes and stay ahead of the curve to better protect their members.
ERIC TRAN-LE is vice president, head of Actimize Premier at NICE Actimize.