Fraud is a multi-headed monster that threatens the integrity of business and commerce. This is especially apparent in the realm of eCommerce, as evidenced during this past holiday season.

eCommerce fraud has been spiking since 2015, when a new credit and debit card security protocol known as EMV chased counterfeit cards out of the world of brick and mortar commerce. ACI Worldwide found that eCommerce fraud attempts during the 2016 holiday season exceeded 2015 frauds by 31%, with transactions increasing by 16%. U.S. retailers are predicted to be the hardest hit, with a whopping 43% increase in so-called card-not-present (or CNP) fraud attempts estimated by ACI, a leading provider of payment services to financial institutions and merchants.

CNP transactions are not the only fraud problem to be stirred up by EMV. Checks have long held allure to fraudsters, and as credit and debit card security has tightened that allure has grown. The Association for Financial Professionals reports 71% of companies it recently surveyed were targets of actual or attempted check fraud last year. 

Fortunately, banks and credit unions are getting better at spotting and stopping fraudulent checks. The American Bankers Association found that banks were able to thwart $8 for every $10 in attempted check frauds in 2014. Contributing to this trend has been the emergence and evolution of new technologies and practices that support faster, better, safer ways to accept and process check payments. 

Remote deposit capture, by eliminating paper hand-offs and slashing clearing times for checks, diminishes float, which enables financial institutions to act more quickly on suspect deposits. In fact, when paired with good fraud and risk mitigation strategies, RDC offers significantly more information about clients and transactions than traditional paper check exchanges. Information such as client location, frequency of deposits, and check-writer account status. This also supports better customer service.

Big data and predictive analytics today play an increasingly significant role in mitigating fraud and other payment risks. Combining these with other advanced technologies like geo-fencing enable financial institutions to segment RDC customers and determine authentication protocols on an individual transaction basis, which by extension enhances customer service. 

Geo-fencing, originally deployed by retailers to lure nearby prospects into their stores, uses the global positioning data for mobile devices to ensure deposits are originating from places where customers are expected to be. If a customer resides in Florida and typically makes mobile deposits from their home, for example, and one day there’s a large deposit to their account originating from Alaska, the transaction can be flagged for closer inspection, rejection, and/or an extended hold.

Digiliti Money takes concerns about payments risk and fraud seriously. That’s why we’re continuously enhancing our mobile deposit solutions with the most advanced fraud-fighting tools available, and working with organizations that can help to support even more fraud protections, improve risk mitigation, and make for better client decisions. Integrating Advanced Fraud Solutions and Early Warning databases with our solutions allows clients to check deposits against all channels in real time, so as to identify duplicates, NSFs and items drawn on closed accounts.

Fraud is not a stationary problem. Fraudsters are crafty, and often operate from the far reaches of the globe. Recognizing and managing the potential for fraud involving checks and other payments is paramount to protecting individual institutions, their customers and confidence in the financial system. It’s a tall order, but it’s achievable, provided financial institutions and their technology partners continue to invest in ongoing improvements to fraud mitigation tools and processes. That’s why at Digiliti Money, we’re committed to helping financial institutions combat check fraud, and empowering them with faster, better, more informed check exchanges.