Mar 3, 2022 -
No single organization or industry can successfully remain isolated in todays fraud space whether that be cybersecurity, financial services, or security and risk around payment solutions. The digitalized landscape in today’s market rises above what we had understood years ago from critical infrastructure needs. With todays technologies we are now seeing changes take place within weeks or days both with electronic payment solution and intricate scamming technologies. Many of these electronic payment solutions allow businesses to process their own ACH and wire transfers through online modules.
As a financial institution, we cannot talk about payment solutions without considering scenarios in which fraudulent activity could occur. As business owners, we must learn about the cybersecurity and payment fraud landscape to understand how to implement ongoing strategies. The goal is to protect businesses and consumers from those who may capitalize from increasing fraud uncertainties.
Despite the decrease in check volume in circulation, they continue to be the payment method most impacted by fraud. Throughout New Hampshire and Vermont, we continue to see a rise in check fraud through the U.S. Postal service, including mail being stolen out of residential mailboxes and postal service blue bins throughout communities, where mail is being intercepted during delivery. When doing so, the fraudsters then create fictitious checks for future use or sell the information on the dark web. Keep in mind, once they have a check, they have everything they need to perform fraudulent ACH transactions as well.
While payment fraud continues to remain a pervasive issue, banks look at ways to leverage technologies and evolve tactics in order to support customers in risk mitigation techniques. By educating account holders about the dangers of ACH fraud and scams, which includes monitoring suspicious activity, utilizing multi-layer & multi-factor authentication security, use of online alerts on transactions and activity, banks will equip businesses with the protection needed. In doing so, it will help deter fraudsters, protect transacting access points and provide notification in a timely manner to avoid losses and detect suspicious activity. In exploring cash management options such as Positive Pay services, this provides a valuable fraud monitoring and prevention tool that financial institutions can offer businesses to give more control and peace of mind. Most importantly deploying positive pay services will allow for control on what types of check and/or ACH transactions come through on account(s). This will better prepare you for combating false checks and unauthorized external withdrawals. This service provides notification of any unauthorized activity in time for businesses to dispute any unauthorized check or ACH activity before
it becomes a loss.
Cybersecurity breaches are not always the act of sophisticated hackers or foreign agents. Most successful cyberattacks are caused by a failure to follow well-established cybersecurity practices. To ensure your business is following these best practices on fraud exposure risk and how to reduce that risk, I encourage you to take steps to collaborate with your peers, financial institutions and insurance companies to make sure you have tools in place to help prevent and/or support you in the case you are compromised by an attack.
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Cash Management Officer