Technical Solutions for Todays Check Fraud Environment

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6 April 2004

Abstract

Boston, MA, USA April 6, 2004

Technical Solutions for Today's Check Fraud Environment

Old foe to the banking industry promises to come back with a vengeance.

Check fraud remains significant when stacked against other frauds affecting the banking industry. Although banks have lost US$708 million dollars to check fraud, they have thwarted almost six times as much check fraud by implementing procedures and technologies to detect and prevent it. But, like any fraud, check fraud continues to evolve as criminals identify new vulnerabilities in the banking system and conjure up new schemes. Recent changes in check legislation have also breathed new life into check fraud by creating new exposures and demanding new methods of deterrence.

Such exposures require financial services to implement new procedures and technologies, as well as to improve old ones. The enactment of Check 21, the need for efficiency and reduced labor costs, and the proliferation of images have resulted in a surge of smart solutions.

"Check fraud is nothing new to financial institutions. Unfortunately, they, and their customers, have had to deal with it for years. However, recent changes in the check industry will open the door to new vulnerabilities, requiring banks to change some of their detection tactics and procedures," commented Ariana-Michele Moore, an analyst in Celent痴 retail banking practice and co-author of the report.

"Check 21 brings both good news and bad news," said Alenka Grealish, manager of Celent痴 banking practice and co-author of the report. "The good news is that the fraud window will close dramatically and automated fraud detection tools will be more powerful. The bad news is that many of the paper-based security features will be lost."

In a new report, "Technical Solutions for Today痴 Check Fraud Environment," Celent explores the current state of check fraud and several of the solutions and deployable tactics to prevent it. In addition to examining the technologies, a variety of vendors are highlighted.

The report is aimed at helping fraud managers and IT executives understand this latest threat and the steps and solutions they can deploy to reduce its impact.

A for this 40-page report is available online.

of Celent Communications' Wholesale Banking research service can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.

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Insight details

Content Type
Reports
Location
Asia-Pacific, EMEA, LATAM, North America
Special Interest
Risk Management & Compliance