Enhancing Over-the-Counter Fraud Detection and Mitigation

Fraud ranks high among the primary challenges that banks face in their teller strategy. Tellers typically focus on an individual item or single transaction, but this alone isn’t enough to confirm their legitimacy. Nearly half of all fraud experienced by financial institutions involves over-the-counter (OTC) transactions.  

Banks can address this challenge with accurate, real-time fraud detection solutions. Having this capability enables tellers to evaluate and consider transactions and items in a broader context by referencing them against prior transactions, image checks, and customer and account behavior trends.  Financial institutions of all sizes can reduce losses and the reputational cost of customer offense due to false positives by gaining a deeper and more accurate view of potential fraud before it can occur.  

Banks experience several types of fraud stemming from various payment methods. For instance, checks are subject to more fraud than any other payment type and come in various forms, such as counterfeits, forgeries, alterations, serial numbers, stop payments, and check kiting. Transaction fraud also accounts for a large percentage of fraud perpetrated against financial institutions. Transaction fraud includes deposits, return deposit items (RDIs), remote deposit capture (RDC), and duplicate deposits through ATMs against new, dormant, and closed accounts. 

Solutions like ARGO’s Teller Payments Fraud bolster fraud prevention by evaluating teller transactions at the point of presentment, providing transaction, image, and Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) analysis. The system monitors cash aggregation, internal and external fraud, and transactional fraud while leveraging advanced image and account analytics to detect a wide range of threats. It also identifies complex scenarios such as unauthorized ACH transactions, account takeovers, large or split deposits, and items on transit watch lists. By detecting and mitigating these threats early, financial institutions can enhance operational integrity and build greater trust at the teller line. 

Tellers should not have to be trained fraud analysts. Solutions that automate the fraud detection process can interpret fraud analysis results and return transaction decisions. Automated systems place necessary holds or direct the teller to accept the transaction or perform appropriate teller or supervisor overrides. Automation routes fraud alerts directly to the back office for adjudication by trained fraud analysts.For more information, download our interview “Improving over-the-counter fraud detection and mitigation in real time.”