Customer fraud protection products for banks and credit unions

Much like a fingerprint, an individual’s voice is extremely detailed, unique and difficult to alter or imitate. As we move towards a cashless and digitally driven world, we are faced with new risks that require new innovations in security – such as the use of voice biometrics.  Banks and credit unions have tapped into biometric authentication as part of a layered security measure to help combat rising risk concerns, with many more expected to move in that direction. According to recent analysis from Goode Intelligence, it is predicted that 1.9 billion bank customers will regularly use biometric interfaces by 2020.

As new advancements enter the market, myths also rise to criticize the new technology that holds the potential of becoming the norm. Many myths have circled around voice biometrics and how it could be more of a security risk rather than a security solution.

There are three particular myths that are fair questions to the idea of voice biometrics but are discredited when you dig a little deeper. The facts of voice biometrics clearly denounce the myths.

The 2018 AFP Payments Fraud Survey revealed that wire fraud contributed to 48 percent of total fraudulent transactions hitting organizations. This means wire transfers make up almost half of the fraudulent transactions experienced. With financial institutions processing thousands of commercial transactions each day, checks and wire transfers are the top targets for fraudsters.

The volume of transfers via the ACH Network is at an all-time high, proving that consumers are increasingly using ACH payments for more regular, predictable transactions. NACHA credits the massive growth to both an increase in bill payments and account-to-account transfers, which grew 24 percent, as well as a rise in business-to-business payments, which rose 13 percent.

This increase among B2B payments underscores the demand for ACH among business customers; therefore, financial institutions should consider offering a service that allows businesses to easily exchange payments with other businesses, as they often initiate regular payments between one another.

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In the wake of new and expanded payments methods like same-day ACH and Real-Time Payments (RTP), another option that continues to make headlines is the use of third-party payment apps like Venmo and Zelle.

In our previous two blogs, we discussed the unique differences and use cases for same-day ACH and RTP, but financial institutions and their account holders must also have a clear picture of third-party apps and their use cases. Only then will they be able to leverage the different methods to their full potential and adequately support them from a strategic standpoint.

The Rise of Third-Party Payment Apps

Third-party payment apps have been growing in popularity, and are a sound option for peer-to-peer (P2P) transactions. For P2P payments, this method is extremely convenient because it uses an identifier, such as a phone number or email address, so that consumers do not have to disclose their bank account information.

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Today, there are more ways than ever for consumers and businesses to transact payments quickly, specifically, with the Venmo, Zelle, same-day ACH and most recently, The Clearing House’s real-time payments system. Although these different methods may seem the same or are perceived as “instant” payment methods, they are not.

With so many options, it can be very confusing, which is why we have broken down what each is, their specific use cases, and which type is better.