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FRAUD
Fraud Webinar with Paul Benda from the ABA
Over 65 bankers participated in a webinar led by Paul Benda, the Executive Vice President for Risk, Fraud, and Cybersecurity at the American Bankers Association (ABA) on Wednesday. The discussion covered crucial topics such as fraud in the context of COVID-19 impacts, emerging fraud trends (Ransomware, P2P Bank Impersonation, Check Fraud), and the associated risks of Artificial Intelligence (AI).
Key insights include:
ABA Check Fraud Directory: This resource provides contact information for banks seeking to file check warranty breach claims with other financial institutions. The directory, searchable by various parameters, facilitates easy communication between banks to resolve warranty breach claims. Participation by more banks enhances its effectiveness for the industry.
Artificial Intelligence (AI) Risks and Benefits: While AI offers significant value for banks, including unique insights, automation of activities, error reduction, and task acceleration, it also poses potential risks. Concerns include transparency and exploitability, algorithmic bias, misuse by malicious actors, and the confusion caused by deep fakes.
COVID Impacts: The webinar addressed the profound impact of COVID-19 on fraud, particularly related to the CARES Act, which triggered a surge in fraud and the creation of a marketplace for Personally Identifiable Information (PII). Unemployment insurance fraud reached unprecedented levels due to inadequate validation procedures and checks on identity or work history. Estimates suggest fraud in the hundreds of billions, with claims exceeding the actual workforce percentage.
Fraud Trends: Notable trends discussed were the positive decline in ransom payments (72% in Q4 2019 to 29% in Q4 2023) and the rise in P2P fraud through random texts.
Internet Crime Complaint Center(IC3) | Home Page as a resource for banks to report and often receive assistance in getting funds back. Note claims filed for the bank or by the bank for bank customers that are received within 24-36 hours of the event are more likely to be successfully recovered.
The MBA has actively engaged with various stakeholders, including DIFS, regulators, the governor's office, legislators, and the AG's office. This involvement includes a joint press release with the Attorney General as part of the national campaign #BanksDon’tAskThat initiated by the ABA. To access the full webinar and join the conversation, click on the provided link here, and use this passcode 7t#dm$J# to access it.
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