Intelligence Report | November 2026 - Flipbook - Page 13
HOW BANKS CAN FIGHT BACK AGAINST THE FRAUDSTERS
By: Jackie Stewart
Given the constant onslaught of fraud, many banks
may be feeling that sentiment from that famous line
from Dante’s Inferno: “Abandon all hope, ye who enter
here.”
combated fraud but also happens at the slowest rate —
But that doesn’t have to be the case. There are ways
Lapp says. This method would usually catch something
banks may not catch the fraud for several hours, Lapp says
— so it also lets the most fraud through.
The second is spotting the fraud in “near real time,”
that banks can fight back. For instance, 86% of bank lead-
within minutes. For instance, with card fraud, the bank may
ers said they had changed ongoing employee education to
allow the first fraudulent payment to go through but would
fight fraud, according to Bank Director’s 2025 Risk Survey.
stop subsequent transactions after something suspicious trig-
Seventy-one percent said they regularly communicate with
gers a response.
customers about scams and threats while 42% said they had
improved internal controls.
Finally, there are efforts to stop fraud in real time. This
one is the most advantageous but also the most difficult for
“I do think that right now banks are desperate for a
banks to achieve, Lapp says. “In real time means [that] I’m
solution,” says Steve Sanders, chief risk officer and chief
about to send you money but I have a fraud system in the
information security officer at CSI.
middle saying, ‘No … she’s a little shady.’ And it declines the
Here are three areas that bank executives and board
members should think about when it comes to winning the
battle against fraudsters.
transaction.”
There are numerous companies out there right now
offering solutions that claim to prevent fraud in real time,
Lapp says. But any bank needs to do thorough due diligence
1. At What Point Do You Stop the Fraud?
Unfortunately for banks, there isn’t one piece of technol-
before implementing any of them. According to Lapp, key
questions to ask vendors could include: How does the pro-
ogy that will prevent all fraud. But banks should be review-
vider claim it prevents fraud in real time? Do they have inte-
ing the products they are currently using. “I think if I were
grations into your core provider already built in, or would
in a bank, I would be challenging my vendors to tell me in
that be part of implementation?
practical terms why their solutions are the best solutions.
... I mean, if you’re not, you’re just going to pay for it,”
Sanders says.
Part of this should be thinking about where in the pro-
2. Push Commercial Customers To Do Better
Regulations require banks to limit a consumer’s liability
for unauthorized electronic funds transfers. But it’s a different
cess the bank is catching the fraud. There are essentially
story when it comes to commercial customers, says Stephanie
three points at which a bank can prevent a problematic
Kalahurka, a partner at the law firm Fenimore Kay Harrison.
transaction, says Andy Lapp, senior director of fraud and
Banks can require businesses to be more proactive in prevent-
managed services at CSI. The first option would be catching
ing fraudulent transactions. Since businesses are often on the
the incident through a “batch” review. This is when a bank
hook for fraud, they have an incentive to do so.
analyzes data at a set time, such as every 12 hours, for any
Probably the easiest step to take is to ensure contracts
potential issues. This is the more traditional way banks have
for commercial deposit accounts are different from those for
THE FRAUD MENACE: PROTECTING YOUR BANK | 11
