Three Strategies to Safeguard Your Bank Against Sophisticated Fraud Attacks

My colleague Rhena Leitermann, treasury management operations manager at Citizens Bank of Las Cruces, and I recently sat down to discuss the state of fraud at our bank, in our market, and around the country. While I knew the level of sophistication had risen dramatically, it’s alarming to hear the lengths fraudsters are going through to obtain personal information. We now have seen fraudulent texts followed up with a FaceTime call to get a screenshot of the customer’s face and a snippet of their voice. With AI in the background, that scenario adds a lot more fuel to the fraud fire.

It can be disheartening to look at the state of fraud today because as fast as we put protocols in place, they can be bypassed. And while we remain watchful, maintaining a safe, secure bank requires more resources and staff scrutiny than it ever has.

We must remain vigilant—to protect our banks, our reputations, and our customers. The question is, how do we do it in today’s environment? It boils down to three key strategies:

1. Educate your staff and customers. It really does take a village to protect against fraud. First, make sure you’re alerting your teams to the latest scams, encouraging them to watch for suspicious behaviors, follow their instincts, and keep on the lookout for out-of-the-ordinary customer activity. Whether it’s frontline staff dealing directly with customers or back-office employees scrutinizing transactions, your team is your first line of defense.

On the flip side, you also have to keep a steady stream of information flowing to your customers. Make sure to use several different channels—in-branch flyers and posters, mailers, online banking alerts, electronic advertisements, social media posts, emails, and more—to remind them of what you won’t ask for (i.e., personally identifiable information) and the latest scams. We’ve found that the more we educate our customers, the better prepared they are when a fraud attempt does happen. Because unfortunately, it’s not a case of if fraud will come knocking, it’s when.

2. Tighten your bank’s protocols. While shifting your internal processes and requirements won’t necessarily stop fraud, it will greatly shrink your risk of exposure. For instance, we’ve recently reduced the default amounts allowed for ACH transfers to and from other banks to $100. This has helped to limit loss should a fraudster be successful at hacking someone’s online banking. Customers, however, continue to have the ability to request an adjustment to their limits based on their needs. We’ve also incorporated a new service from our core banking system that recognizes if a new customer device has been engaged and/or if the transaction triggers other criteria defining it as high risk. Once the system identifies a high-risk transaction, it will block the transaction until the customer can verify was them that initiated it. While it may mean a slight inconvenience for the customer in the case of a legitimate transaction, when we explain that we’re trying to protect their money and account, they always understand.

To that point, consider what new procedures, tools, or solutions you can put in place. New products may already be available to you, so check with your current core provider and other partners on what they have ready to help you with tightening your fraud protections.

3. Tap into payments experts. This is not the environment to underestimate attackers. Ask for help in identifying chinks in your armor. Reach out to those who are dealing with fraud across community banking and can support you in identifying a path forward. Consider that ICBA Payments has a very knowledgeable team who can discuss the latest fraud trends with you and offer advice on how to mitigate your bank’s risk. Look to the ICBA Solutions Directory for providers who can help you ramp up your fraud prevention. But broaden your horizon and seek out those who can help you shore up your defenses.

Because fraud will always exist, and fraudsters will continue to deploy increasingly sophisticated attacks. To thwart fraud attempts, our best course of action is to stay one step ahead of the fraudster, arming ourselves with the knowledge, tools, and resources that will cut them off at the pass. Thankfully, ICBA and ICBA Payments can help us do just that.