2009 Bank Tech Forecast: Banks Must Become Proactive to Stop Fraud

Despite the steady decline in the number of checks written over the past few years, check fraud continues to be a major concern for banks and retailers . One of the benefits arising from the adoption of Check 21 that can help improve fraud prevention is part of the image exchange and archive process.

Currently image exchange and archiving offers many advantages, including cost reductions in storing and delivering check images versus their physical documents. Additionally, float time is also reduced, resulting in improved availability of funds, and a reduction in the risk of lost items and, more important, the risk of fraud. However, the full benefits of image exchange and archiving have not yet been fully exploited for fraud-prevention purposes.

When banks and financial institutions use a common, shared image archive service or facility, fraud detection tools can be applied not only to "on-us" checks, but to all check images if the images are shared among members. This shared service or facility opens up a multitude of opportunities for members to combat fraud on a whole new level. Banks can verify the authenticity of checks at the time of acceptance at the branch level, or even at the point of sale, which would significantly reduce the time it takes to determine if a check is fraudulent, implement follow-up procedures for suspects or even be able to decline the acceptance of a check.

When a check is received by a bank or retailer, technology would be able to look up reference images in the centralized database to examine the authenticity of the check and prevent signature forgery or counterfeits. Signature and check stock verification technologies can process the image of the check quickly and efficiently to identify suspicious items. The technology also offers the benefit of improving customer service and satisfaction by enabling banks to proactively inform their customers of potential fraud.