Most financial institutions anticipate new fraud risks post-Same Day ACH launch

Financial crime, risk and compliance software provider NICE Actimize released survey results showing more than 90 percent of financial institutions anticipate new fraud threats following the transition to the Same Day Automated Clearing House (ACH) this September.

More than half (54 percent) of respondents feel they do not have the appropriate fraud tools to handle Same Day ACH. Seventy percent now use manual review to detect ACH fraud but expect to eventually employ intelligent authentication in the future.

“We know from other markets, such as the U.K., that the launch of Faster Payments is aligned with an uptick in fraud attacks and losses,” said Erez Zohar, Vice President & General Manager, Fraud & Cybercrime Management Solutions, NICE Actimize. “This means that U.S. financial institutions need to be prepared with fraud strategies on day one.”

Mr. Zohar said new threats could emerge  from Same Day Payroll and account-to-account transfer. Commercial banks could be targets of social engineering.

NICE Actimize recommends four ways financial institutions can protect themselves:

1.Prepare an authentication management approach allowing good customers to access same day ACH services, while stopping fraudsters from entering the system.

2. Avoid manual review for Same Day ACH transactions. While manual review has been effective for traditional ACH where banks have 48 hours to flag and stop fraud – manual processes won’t work in a speedier environment.

3. Employ fraud tools using behavioral analytics to spot anomalies indicative of fraud.

4. Design fraud operations specific to a Same Day environment.

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