Newsroom
February 06, 2018
Fed survey finds payments fraud remains issue for FIs
A survey of 283 financial institutions – including credit unions – revealed that payments fraud losses remain a big issue for the majority (75 percent) of respondents. This survey, conducted by the Federal Reserve Bank of Minneapolis, also worked to identify ways to reduce this kind of fraud.
The survey found that financial institutions' losses on debit and credit cards were typical, with 96 percent of debit card issuers and 77 percent of credit card issuers reporting them in 2016. Furthermore, now more than 80 percent of financial institutions are issuing chip cards to consumers in an attempt to combat fraud for in-person point-of-sale transactions.
Of the credit union respondents to the survey, 64 percent were less than $50 million in assets, 22 percent ranged from $50 to $200 million in assets, 13 percent were $200 million to $1 billion in assets and 2 percent were more than $1 billion in assets.
Of note from the survey, a greater portion of smaller financial institutions (those with less than $50 million in assets), reported no payment fraud attempts (38 percent) and no fraud losses (45 percent). Comparatively, more than 80 percent of financial institutions in all other asset-size segments reported that they experienced payment fraud attempts and losses.
As far as fraud prevention, the survey found that a centralized approach, where it is managing by one area within the financial institution, is used by 58 percent of respondents; 12 percent use a decentralized approach; and 30 percent have a mixed approach. For those financial institutions with more than $1 billion in assets, 33 percent manage fraud through a centralized approach, 17 percent through a decentralized approach and 50 percent with a mixed approach.
When analyzing ways to reduce fraud, the survey found that customer diligence – reviewing transaction activity and statements and reporting any suspicious activity to their financial institutions – was effective for all payments types: cards, checks, and automated clearinghouse and wire transfers.
At 3 p.m. Eastern Feb. 15, the Federal Reserve Bank of Minneapolis will hold a free webinar reviewing these results. To register, please send an email to mpls.psog.events@mpls.frb.org by Feb. 8.
This survey was conducted during July and August last year and had about a 5.8 percent response rate from financial institutions.
The survey found that financial institutions' losses on debit and credit cards were typical, with 96 percent of debit card issuers and 77 percent of credit card issuers reporting them in 2016. Furthermore, now more than 80 percent of financial institutions are issuing chip cards to consumers in an attempt to combat fraud for in-person point-of-sale transactions.
Of the credit union respondents to the survey, 64 percent were less than $50 million in assets, 22 percent ranged from $50 to $200 million in assets, 13 percent were $200 million to $1 billion in assets and 2 percent were more than $1 billion in assets.
Of note from the survey, a greater portion of smaller financial institutions (those with less than $50 million in assets), reported no payment fraud attempts (38 percent) and no fraud losses (45 percent). Comparatively, more than 80 percent of financial institutions in all other asset-size segments reported that they experienced payment fraud attempts and losses.
As far as fraud prevention, the survey found that a centralized approach, where it is managing by one area within the financial institution, is used by 58 percent of respondents; 12 percent use a decentralized approach; and 30 percent have a mixed approach. For those financial institutions with more than $1 billion in assets, 33 percent manage fraud through a centralized approach, 17 percent through a decentralized approach and 50 percent with a mixed approach.
When analyzing ways to reduce fraud, the survey found that customer diligence – reviewing transaction activity and statements and reporting any suspicious activity to their financial institutions – was effective for all payments types: cards, checks, and automated clearinghouse and wire transfers.
At 3 p.m. Eastern Feb. 15, the Federal Reserve Bank of Minneapolis will hold a free webinar reviewing these results. To register, please send an email to mpls.psog.events@mpls.frb.org by Feb. 8.
This survey was conducted during July and August last year and had about a 5.8 percent response rate from financial institutions.
Related Resources
Add to Calendar 2020-10-22 14:00:00 2020-10-22 14:00:00 Navigating Mergers and Acquisitions During these uncertain times, credit union mergers are a hard reality to face. We strive to strengthen credit unions with as much support as possible to maintain steady growth and success. While NAFCU does not encourage credit unions to merge, we realize mergers are a part of our industry’s reality. Please join us for a discussion on must-know concepts regarding mergers and other similar transactions, including bank and credit union branch acquisitions. This “101” presentation will focus on key concepts that will let you focus on the opportunities that will work for you, and the strategies that will bring you success. Again, NAFCU does not encourage mergers, but if you are considering one, we want you to be armed with helpful information. Key Takeaways Understand how to identify early whether merger or purchase/sale opportunities will bring material benefits Discuss strategic questions to ask your credit union whether merger is right for you (or how to stay independent) Review how to navigate major un-written rules in the application process Gain knowledge about member votes and communications Purchase Now$295 Members | $395 Nonmembers (Additional $50 for CD)One registration gives your entire credit union access to the on-demand recording until October 22, 2021.Already registered? Go to the Online Training Center to view live. Who Should Attend? Chief Executive Officers (CEOs) Executive Vice Presidents (EVPs) Chief Financial Officers (CFOs) Education Credits NCCOs will receive 1.5 CEUs for participating in this webinar NCRMs will receive 1.5 CEUs for participating in this webinar. CPA credit information is below; recommended 1.5 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Associate Director of Education, NAFCU Learning Objectives: Understand how to identify early whether merger or purchase/sale opportunities will bring material benefits. Discuss strategic questions to ask your credit union whether merger is right for you (or how to stay independent). Review how to navigate major un-written rules in the application process. Gain knowledge about member votes and communications. Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.5 credits Recommended Field of Study: Finance – Technical National Association of Federal Credit Unions (NAFCU) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. Learn more. About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, D.C. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU digital@nafcu.org America/New_York public
Navigating Mergers and Acquisitions
Credits: NCCO, NCRM, CPE
Webinar
Add to Calendar 2020-10-22 14:00:00 2020-10-22 14:00:00 [INTERVIEW] CU Blueprint for Secure Cloud-First Strategies About the Interview “Moving to the Cloud” can seem like an ambiguous, one-time, heavy-lift project, often leading to misunderstanding and analysis paralysis within credit unions. For your CU to stay competitive, you want to deliver a seamless digital experience that's more than flashy applications. It needs to be built on flexible, secure infrastructure that allows innovation. Join us for this panel discussion and learn practical, proven processes to establish and evolve secure, cloud-first strategies. Hear best practices in communication, talent, and technology, and walk away with a blueprint for your secure credit union transformation. Watch the Interview On-Demand Web NAFCU digital@nafcu.org America/New_York public
[INTERVIEW] CU Blueprint for Secure Cloud-First Strategies
preferred partner
Amazon Web Services
Webinar
How to Leverage Fintechs for Your Credit Union’s Success
Student Loans, Consumer Lending, Growth & Retention
preferred partner
LendKey
Blog Post
Get daily updates.
Subscribe to NAFCU today.