Increase Funding for Fraud Prevention: Whats the Allocation?

  • Fraud Prevention, Legislation

As if the industry has not heard enough about the FFIEC Authentication Guidance, recent studies state that only 11% of banks and credit unions have conformed since the update last year. The results of the 2012 Faces of Fraud Survey also stated that half of the respondents do not conform now and a one fourth of the respondents did not even know the status of their conformance. This causes some concern for those financial institutions that look to increase their fraud prevention spending this year. Misunderstanding security resources and being under educated on options can cause a companys additional funds to be spent in vain. In this case, unfortunately, you dont always get what you pay for. It is vital that banks and credit unions alike fully understand their organizations unique solution. When it comes to security, even in the same industry, one size does not fit all.

According to the survey, the top five types of fraud are Credit and Debit Fraud, Check Fraud, Phishing and Vishing, ACH and Wire Fraud, and ATM fraud. Each type of fraud poses different risks and therefore should be addressed in a different manner.The FFIEC guidelines have motivated companies to take a closer look at their security measures. More emphasis will need to be put on online and mobile banking as well as cross channel risks.

A large amount of the increased funds will go towards staff training and awareness programs to consumers. Some experts question this ratio of investments because they believe that it will not truly solve fraud from being committed. A smaller percentage has been predicted to be spent toward outside vendor management. ID verification and authentication vendors should be taken into larger consideration for the increased amount of money. These outside vendors can help prevent fraud regardless of how educated the consumer is. This is not to say that consumer education is not important, it just does not prevent online fraud in a tangible way. To ensure your money is not going to waste, look into ID verification and authentication options to help protect your customers.

[Contributed by, EVS marketing]