Leveraging Real-Time Detection and Automated solutions for OTC and Check Transactions

Almost half of all fraud financial institutions experience occurs in over the counter (OTC) transactions, making it crucial for institutions to accurately detect fraud in real time to reduce loss and the reputational cost of false positives. Checks remain the target of more fraud than any other payment method, with billions of dollars in global losses being reported in 2023. Financial institutions experience check fraud in several ways like counterfeits, alterations, forgeries, stop payments, and check kiting.

Additionally, transaction fraud accounts for a sizable percentage of fraud perpetrated against financial institutions. Examples of transaction fraud include deposits, return deposit items (RDIs), and duplicate deposits through ATMs against new, dormant, and closed accounts.

To combat the constant threat of check fraud, financial institutions should consider implementing solutions that evaluate teller transactions at the point of presentment, providing transaction, image, and Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) analysis. Necessary functionality includes:

• Monitoring capabilities that target cash aggregation, internal and external fraud, and transactional fraud;
• Online real-time transaction processing that provides interdiction messages to frontline workers; and
• Automatic holds, warning messages, overrides, and transaction-denial capabilities enable financial institutions to protect funds.

Solutions that provide automated decisions help alleviate the burden placed on tellers when determining potential fraud. For instance, automatic systems place necessary holds or instruct tellers to either accept transactions or perform appropriate overrides. Through automation, fraud alerts can be routed to the back office for adjudication by qualified fraud analysts.

For more information download our white paper: “Mitigating OTC Fraud in Real Time”