Increase Funding for Fraud Prevention: Whats the Allocation?

As if the industry has not heard enough about the FFIEC
Authentication Guidance
, recent studies state that only 11% of banks and
credit unions have conformed since the update last year. The results of the 2012
Faces of Fraud Survey
also stated that half of the respondents do not
conform now and a one fourth of the respondents did not even know the status of
their conformance. This causes some concern for those financial institutions
that look to increase their fraud
spending this year. Misunderstanding security resources and
being under educated on options can cause a companys additional funds to be
spent in vain. In this case, unfortunately, you dont always get what you pay
for. It is vital that banks and credit unions alike fully understand their
organizations unique solution. When it comes to security, even in the same
industry, one size does not fit all.

According to the survey, the top five types of fraud are
Credit and Debit Fraud, Check Fraud, Phishing and Vishing, ACH and Wire Fraud,
and ATM fraud. Each type of fraud poses different risks and therefore should be addressed in a different manner.The FFIEC guidelines have motivated companies to take a
closer look at their security measures. More emphasis will need to be put on
online and mobile
as well as cross channel risks.

A large amount of the increased funds will go towards staff
training and awareness programs to consumers. Some experts question this ratio
of investments because they believe that it will not truly solve fraud from
being committed. A smaller percentage
has been predicted to be spent toward outside vendor management. ID
verification and authentication vendors should be taken into larger
consideration for the increased amount of money. These outside vendors can help
prevent fraud regardless of how educated the consumer is. This is not to say
that consumer education is not important, it just does not prevent online fraud
in a tangible way. To ensure your money is not going to waste, look into ID verification
and authentication options to help protect your customers.

[Contributed by, EVS marketing]

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