Survey: Same Day ACH Environment Can Lead to New Fraud Threats

April 21, 2016         By: Mike Dautner

More than 93 percent of financial institutions in the United States believe that the impending transition to Same Day ACH will give birth to new fraud threats, says a recent survey conducted by NICE Actimize.

Results of the ‘Same-Day ACH Fraud Preparedness Survey’ also showed that more than 54 percent of respondents had no appropriate fraud tools for handling Same Day ACH transactions.

Seventy-five percent of them used manual review to detect ACH fraud, but this figure will likely drop to 55 percent for the new ruling, it noted.

The study also found that 70 percent of participants will likely use intelligent authentication to prevent attacks.

Erez Zohar, Vice President & General Manager, Fraud & Cybercrime Management Solutions, NICE Actimize, commented, “We know from other markets, such as the U.K., that the launch of Faster Payments is aligned with an uptick in fraud attacks and losses. This means that U.S. financial institutions need to be prepared with fraud strategies on day one.”

On September 2016, the first of the three implementation phases of Same Day ACH will come into effect, enabling same-day processing of virtually all types of ACH payments, including credits and debits.

NACHA, which manages the development, administration, and governance of the ACH Network—the backbone for the electronic movement of money and data in the US, adopted the new ruling to provide a new, ubiquitous capability for moving ACH payments faster.

To help protect Same Day ACH transactions, NICE Actimize advises financial institutions to come up with an authentication management approach to prevent fraudsters from entering the system, use fraud tools that leverage behavioral analytics to effectively detect anomalies, and devise fraud operations specific to a Same Day ACH environment.

NICE Actimize also urges financial institutions not to depend on manual review for Same Day ACH transactions.