A Community Bank Perspective on Fraud Prevention

Guardian Analytics recently spent some time with one of our community bank customers and was struck by their business and technology approach to securing their account holders.

This Illinois-based $2.5B bank strives to offer leading online and mobile products competitive with the big national banks AND deliver community bank style service. Expanding their offerings without increased fraud risk required enhancing their fraud prevention capabilities.  Here are some valuable snippets:

Security point of view: You can’t depend on account holders, you can’t secure the endpoint: The bank understood that cyber criminals continue to attack account holders directly and designed their fraud prevention strategy with the notion that all end points have been compromised and you can never truly secure the end point.

The bank wanted a solution that would transparently provide complete coverage across all account holders and not require account holders to do anything or change their processes. They also wanted a solution that had no dependencies on understanding malware or fraud patterns. As the bank states – “You don’t know what your enemy will do, but you always know what your customers have done.”

Business point of view: The risk of fraud is too great to the business not to take action. The bank recognized the strategic value of preventing fraud and that the true cost of fraud goes well beyond any financial losses. Customer churn, reputation issues, and lost staffing time are all risks of a fraud event that the bank was not willing to take.  An executive at the bank explained,  “I’d rather invest a known amount in a proven solution, than risk the unknown costs of a fraud event.”

Benefits beyond fraud losses averted. The bank deployed our solution, ACH ODFI & RDFI Fraud Detection, and has experienced a wide range of benefits.  What stands out to me is the impact it has had on their ability to retain current clients and draw in new business. The CISO of the company goes out on sales calls with the account management team,  positioning to their commercial clients that the bank has industry leading security, with ACH ODFI & RDFI Fraud Detection as a critical part of their story.

Additionally, every call to a customer about suspicious activity has become a relationship building event.  The bank receives wildly positive feedback – “we’re so glad you have our back!”

After implementing ACH ODFI & RDFI Fraud Detection, the SVP of Deposit Operations summed up the project quite nicely when he said, “It’s the perfect balance of sophistication and affordability.”