At PAYMENTS 2019 this week, ACH Alert joined bankers Kim Dodson, CTP, Vice President of Treasury Management at Independence Bank, and Don Youngberg, AAP, Assistant Vice President of Business Services of Mountain America Credit Union, during the panel, “Going Beyond Visibility and Taking Action on Transactions.”
In this session, they discussed how financial institutions can enhance their fraud prevention strategy by empowering customers to detect and respond to suspicious activity before the funds leave their account – a critical area that should be top of mind for financial institutions.
Taking Action to Prevent Fraud
Currently, online banking systems offer visibility for transactions, but they do not allow account holders to take action and protect themselves against suspicious activity. In today’s digital-first world, there is a critical need for banks and credit unions to empower their customers and members to respond to potentially fraudulent activity before it happens.Consider that last year, 65 percent of businesses experienced the same or more fraudulent activity compared to the previous year, according to Experian’s 2018 Global Fraud and Identity Report. Institutions must empower their corporate account holders with greater control to combat fraud and the financial risks associated with it.
This is especially the case as businesses continue to remain a top target for payments fraud. Unlike consumers, who have up to 60 days to dispute unauthorized ACH transactions thanks to protections like Regulation E and NACHA, businesses only have 24 hours to respond to suspicious ACH debits.
Additionally, the Association of Certified Fraud Examiners revealed that small to medium-sized businesses lose a median of $200,000 or an estimated five percent of their annual revenues to fraud each year. These losses are partly due to this shorter timeframe businesses have to report and dispute fraudulent transactions.
However, by arming account holders with actionable treasury management solutions that are supported by interactive fraud prevention tools, banks and credit unions can empower account holders to proactively prevent check fraud and dispute unauthorized ACH debits in a timely manner, before the funds ever leave their account. This is achieved through an actionable online banking system that enables account holders to take action either through their online banking platform or phone using voice biometrics.
Tapping into Voice Biometrics
Historically, a customer needed to be present to visually confirm their identity and authenticate a transaction. This has changed as we move into a digital marketplace and transactions take place in a “customer-not-present” environment.
As a result, voice biometrics has emerged as the closest (and easiest) interaction between two parties that are communicating remotely. Additionally, implementation of voice as a means of layered authentication is now cost effective and widely available.
Moreover, consumers increasingly demand frictionless authentication across all of the channels in which they engage. The more (needed) security added, there is an adverse effect on the customer’s experience with the transaction and with the organization, often leading to decreased loyalty and levels of adoption. The user experience is ultimately impacted.
There must be a balance of both appropriate security measures and customer experience. With voice biometrics, financial institutions can provide frictionless authentication, while streamlining the customer experience and also preventing fraud.
Enabled by the prevalence of web self-service and mobile applications, voice biometrics is widely used today to verify customers’ identities via digital channels, and financial institutions must place a greater emphasis on this technology to protect their business customers, providing a competitive edge while minimizing fraud.
Download our whitepaper, “Combating Fraud: The Role of Voice Biometrics in Your Layered Security Program,” here.