How Banks & Credit Unions Need to Treat Fraud Management in 2022

Fraud Risk Management in Banks

Fraud is a leading concern among banks and credit unions. Fraud management in 2022 is more complex than ever, and financial institutions that fall behind in their management planning could pay the price. Banking has never been more reliant on digital access and transactions, and without the proper security in place, fraud opportunities can increase exponentially.

Online payment losses reached astonishing levels, in excess of $56 billion, in 2020. Credit unions, in particular, are ill-equipped to survive potential losses from fraud. With the stakes so high, online fraud management has come into the spotlight within the banking world. Fraud losses can quickly cripple financial institutions if not handled proactively in real-time. As cybercrime continues to escalate, banks and credit unions need to begin investing significant internal and external assets to deter fraudulent behavior. 

Why is Fraud Management More Important Than Ever?

Good fraud management creates a positive customer experience. When customers can trust your institution, they will work with you to meet all of their needs. Fraud management also impacts risk analysis and decision-making, as well as your organization’s operational efficiency. Making fraud management a significant part of your daily processes will prevent both you and your customers from facing financial losses, distrust, and potential legal implications.

Fraud management is directly connected with maximizing and protecting your financial revenue, as well as your reputation as a dependable banking or loan partner. To prevent losses and safeguard every client that uses your services, a risk strategy must be developed and implemented in order to identify suspicious activity, fraud trends, phishing scams, and other tactics used to exploit institutions and their user base. 

Modern technology has made it relatively easy for hackers to pose as vendors, legitimate customers, or other institutions trying to make an honest transaction. About 3 million people 18 years of age and older were victims of fraud in 2017. Today, the rates of fraud experienced by banks and credit unions are exponentially higher.  Fraud management is a necessity in this era of online banking and money management. Every institution holds a unique risk appetite toward today’s modern threats, however, as the digital world makes financial actions more convenient, new challenges arise. If fraud management best practices are ignored, banks and credit unions will soon find themselves in hot water with potential compliance errors and a neglectful customer journey. 

Identifying Theft Before It Happens

Ultimately, the best way to prevent theft is to stop it before it happens. Being proactive to prevent issues relating to fraud is critical to any successful fraud management program. You will want a total life cycle approach to fraud management that does not leave gaps or potential blind spots within your digital channels. Each step of the banking process can be impacted by fraud, and therefore, potential vulnerabilities need to be examined on a routine schedule.

The many means of fraud necessitates a multi-layered approach. It’s not enough to just provide online security for your internet banking site or ensure that tellers ask identity confirmation questions when handling all transaction types. You will need to deploy several kinds of fraud prevention in order to maintain security in the modern banking world.

The Steps That Banks and Credit Unions Need To Take for Proper Fraud Management

Thankfully, security options and fraud prevention services are readily available. As stated before, fraud management requires a multi-pronged approach, and you will need to have all of the right security measures in place to ensure that your fraud prevention plan will work reliably.

Develop a Fraud Prevention Program

The key to preventing fraud is to develop a holistic program for fraud prevention. You cannot just have a single form of protection in place since there are so many ways that fraud might impact your customers. Having a simple fraud screening in place for tellers is not going to be enough, and neither is adding a very basic set of restrictions to online banking.

You will need to develop a full program that is adhered to by staff and in place for every kind of transaction your institution carries out. There is no other way to reliably prevent fraud, and without these checks at every level of the banking process, problems will certainly arise.


Your teams need to know how to recognize — and handle — fraud. From the call center to frontline staff, everyone who works for you needs consistent and current training in fraud prevention. Cybercriminals develop new techniques every day, and so financial institutions must regularly develop new ways to protect themselves and keep their team up to date.

Develop the Right Procedures

Your procedures for handling fraud must be consistent across all locations and employees. Your staff are your eyes and ears, and only a diligent commitment to fraud prevention will keep your accounts secure. Your staff will need clear and consistent fraud management protocols, and they will need all training necessary to provide this service effectively each day. 

Frontline staff needs to be educated about the signs of fraud, both digital and in-person.

Biometrics and Technology

Automated systems like Voice ID can help prevent bad actors from calling in to try to defraud clients. Biometrics and other protections for online banking can also make a big difference in the prevention of online banking fraud. These automated processes should be paired with protocols that ask for account verification. Users should provide verification before taking any action on an account, and should provide multiple forms of verification before making changes to sensitive areas of the account, such as their personal details.

Call center and frontline workers can easily verify that the person standing before them is the account owner through the use of photo identification and other verification of information, like social security numbers on file and the kinds of accounts that are held at the bank or credit union. However, online forms of verification may require a more involved implementation process.

Fraud Management Software That You Can Trust

If you are ready to upgrade your fraud prevention tool, don’t be afraid to get help. You can automate many of the highest risk processes that your bank or credit union engages in each day to help track inconsistencies and isolate fraudulent activity before it impacts accounts. At GDS Link, we offer you the right products and services to make your banking processes safe and secure, while reducing fraud rates.

If you are ready to set up superior fraud management solutions and create the safe and effective banking experience your customers deserve, reach out to us today. We can help deliver artificial intelligence solutions that make your organization capable of handling fraud risks in 2022 and beyond.

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