One of the truly great things about the digital era that we're now living in is the newfound sense of convenience that comes with it. This is especially true for credit union members who can now manage their financial needs anywhere, anytime, and from virtually any device on Earth with an active Internet connection.
However, you can't overlook security when offering convenience. Fraud continues to be a threat, with an alarming 70% of financial institutions suffering losses over $500,000 in 2022 alone.
While there are numerous companies offering fraud detection and prevention solutions, it is important to understand the key criteria that makes a fraud detection system effective. Continue reading to discover the essential capabilities your fraud detection system should possess in order to be considered reliable.
Your credit union has a great opportunity to protect against fraud from the moment someone becomes a member and throughout their entire relationship. Your credit union's solution for fraud prevention and detection should keep your members safe not only at the start, but also during their time with your credit union.
Some features that provide thorough protection against fraud are:
The importance of creating a high-quality experience that members can depend on cannot be overstated.
It's important to remember that not all fraud is targeted against your members. Sometimes, fraudsters go straight for your credit union.
A good fraud solution has built-in protection to immediately identify these situations. An efficient fraud prevention system should mitigate risk in these situations:
In order to prevent these situations, your fraud solution system should include these features:
The same is true of how your fraud solution should help to protect against third-party fraud, too. There are common situations where a rogue actor may attempt to impersonate one of your credit union members or create an entirely fake identity like:
Your fraud solution should know exactly what types of suspicious activity to watch out for to help put a stop to third-party fraud right away. Features that help detect and prevent third-party fraud include:
Another feature that will make your fraud solution effective is that it is built with scalability in mind. It's an ideal opportunity to future-proof your credit union's growth, instead of starting from scratch every time your credit union membership grows, offered products and services expand, and revenue increases. This allows you to focus those resources on matters that will deepen the member experience and the loyalty that comes with it.
Here are the features that protect you against fraud while your credit union grows:
The final thing your fraud solution needs to provide is ongoing monitoring for members. Because thousands of data breaches occur every year, continuous fraud protection is essential. Consistent, high quality fraud detection can prevent:
In order for your fraud system to be a long-term solution, it needs to include these features:
In the end, financial services fraud isn't going away--we must remember that as we collectively deepen integrations with modern-day digital solutions. Evaluate your fraud solution to determine if it meets the standards outlined above. Regularly assess your prevention and detection methods as fraud tactics continue to evolve. With the right fraud solution, you will maintain your members' trust, protect your credit union's finances, and stop fraudsters.
At FLEX, we fully support your credit union in protecting against fraud. That is why we're proud to partner with Alloy, a top-notch company that prevents, detects, and mitigates fraud. To help bring features like those outlined above to your credit union, click the button below to find out more about our seamless integration so you can protect your credit union and its members.