Automating Know Your Customer (KYC) and Know Your Business (KYB) checks are vital for payroll service companies.
Check fraud is a persistent issue, even in our rapidly evolving digital world. The crime may seem almost antiquated, but it poses a real threat to both individuals and businesses. With this in mind, we’ll delve into understanding check fraud, its various forms, the impact it has, and most importantly, the preventive measures that can be taken.
Given the accelerated pace of digitalization fed by increasing demand for speed and 24/7 online convenience, financial institutions (FIs) are faced with the need to move a greater number of activities online. Some FIs may do so at the expense of increasing risk of fraud, while others may do so with greater inconvenience to account holders, but fortunately, technology is making it easier to get the balance just right.
As more and more banks implement an omnichannel experience to serve their customers, it’s clear that fraud and financial crime management needs to follow suit.
Over the past few years, bank account fraud has become one of the largest threats against financial institutions (FIs). Just last year, there’s been over $52B in identity fraud losses affecting 42 million U.S. consumers. And this grew 79% y-o-y. Community banks and credit unions must find a way to balance methods of managing fraudulent activity with attracting new customers. Otherwise, they may be left behind. And the stakes are higher than ever. At the same time FIs are looking at high application abandonment rates.
Digital change happens at the speed of light, and fraudsters move nearly as quickly to exploit vulnerabilities and gaps in fraud prevention capabilities. Financial institutions cannot afford to leave protection up to chance.
According to TransUnion’s global online fraud trends analysis, digital fraud attempts against financial institutions have seen a spike of 22% in the U.S. and 46% globally since the pandemic began. And in our recent blog post, we have identified the common fraud trends, which include identity theft and spyware, synthetic identity fraud, credit washing, transaction fraud, and data breaches.
The pandemic has catalyzed the digitization process like nothing we’ve seen before. With 10 years worth of digitalization happening in the first 6 months of 2019, financial institutions who haven’t invested in their digital strategy are now facing severe challenges on the following fronts: