Mitek, which specializes in carrying out activities in the area of developing fraud prevention tools, announced the expansion of its partnership with the Alogent payment processor.
The press release, which was published last Wednesday, August 21, notes that as part of the mentioned cooperation, the payment system integrates the Mitek Check Fraud Defender (CFD) program. The solution from the developer of fraud prevention tools will be used in the Alogent product to automate Unify deposits. In this case, integration aims to respond to the growing threat associated with external criminal influence on check operations. Recently, fraud has been committed more and more often during the mentioned operations. CFD will become a tool to counter the corresponding threat.
The press release notes that, according to data contained in the annual Federal Reserve Financial Services Survey, the share of check fraud, which also includes document forgery, in the overall structure of bank fraud in the United States is 31%. Special attention was also paid to the fact that last year the total amount of losses from check fraud exceeded the $20 billion mark. Besides, it is expected that in 2024 the corresponding indicator will show an increase relative to the result of 2023.
It is worth noting that artificial intelligence has provided new opportunities for fraudulent activities. At the same time, this fact, which has many forms of manifestation, is by no means evidence of some fundamental harmfulness of AI. Artificial intelligence, like many other mass distribution technologies, can be used both within the framework of a positive scenario and in the context of efforts aimed at achieving what can be called negative goals. By applying AI, scammers make counterfeit checks, alter legitimate checks, and forge signatures. The corresponding information is contained in the press release.
The current configuration of fraudulent activity signals the need for more advanced verification tools. It is also worth noting that in the context of the relevant call, the personal awareness of users is important. Against the background of the threat of fraudulent interference, such a query in the Internet search system as how to know if my camera is hacked is relevant, which will allow anyone to get information about signs of unauthorized access to the device.
The press release contains information about a client who managed to reduce the losses by $16 million by using CFD’s combination of imaging science, machine learning, and artificial intelligence to analyze checks across all channels in real-time.
Alogent Vice President of Product Management Ashish Bhatia says that the tactics of transaction fraud are becoming more sophisticated, which is why effective counteraction to relevant activity is important from the point of view of protecting customer operations. He also noted that the integration of CFD with Unify will allow the company to provide its partners in banks and credit unions with advanced tools driven by artificial intelligence. According to him, appropriate tools help to reduce risks across all deposit channels. Also, in this case, an unhindered user experience is provided for account holders.
It is worth noting that currently, checks continue to be the preferred payment method for some organizations. The existence of various digital alternatives has not been a factor in changing the corresponding priority.
Currently, in the United States, checks are part of B2B transactions in several spheres of activity. For example, in the real estate area, 21.2% of financial transactions in the mentioned category are carried out using checks. At the same time, retailers use checks in 15.2% of their B2B payment operations.
Data from the Association for Finance Professionals indicates that 75% of treasury professionals recognized the ongoing use of checks within their organizations. Also in this case, 34% of respondents said checks accounted for over a quarter of their payment transactions.
The mentioned facts are evidence that check fraud will continue to be a significant threat in the short and medium term.
It is worth noting that the manual nature of paper checks increases the risk of errors, which can worsen interaction with suppliers and long-time employees. Physical characteristics are also a target for scammers. Paper checks can be easily lost or stolen during transportation.
As we have reported earlier, U.S. Bank Expands Its Partnership With Edward Jones.
