Same Day ACH is now available. As most know, this new NACHA rule went into affect on Friday, September 23rd. This new movement towards faster payments also changes the dynamics of ACH related-fraud and we can expect (as experienced in Europe) to see a rise in ACH related fraud attempts. While it’s important that financial institutions adjust their fraud detection strategies, fraud detection solutions are also on the hook to offer better fraud detection.
The three most important components to look for in a fraud detection solution include:
Real Time Integration: Probably, the first and most important enhancement is real-time integration. If ACH payments are going to settle on the same business day, their legitimacy needs to be verified in almost real-time to leave enough room for the settlement process.
Quick Investigation: The requirement of settling ACH payments within hours means that Fraud Analysts have to resolve suspicious transactions as quickly as possible. This means that the Fraud Detection solution needs to do a better job in providing contextual information about why a batch has been flagged, what aspect of it is suspicious, and what needs to be looked at to get a resolution. It is no longer sufficient to just flag suspicious batches with little or no context and expect the fraud analysts to initiate a potentially lengthy investigation. The solution providers need to go beyond that and be part of the investigation process.
Better Accuracy with Less False Positive: Verifying ACH batches at a faster pace requires either more resources or better technologies / algorithms to catch frauds with fewer number of alerts. In the past, there might have been lesser sensitivity to the higher number of alerts (false positive) generated by ACH fraud detection solutions due to the time factor. However, with the introduction of Same Day ACH, that leverage is gone. It now matters how many false positives are generated by each solution, as this may require the addition of more staff to be hired or allocated to review the high number of alerts in the short period of time.