Low-tech risk continues to rear its head as the world races to achieve its digital ambitions. This has played out geopolitically and is now impacting the banking community. While 90% of community banks indicated they are ready to implement new digital initiatives, and 40% said they are already integrating artificial intelligence and machine learning into their strategic plans, old school check fraud remains an outsized problem for the banking community. Bad actors continue to develop new strategies to cash fraudulent checks, and some continue to use old-school methods.

No matter the method, losses from check fraud add up for banks worldwide. Last year, check fraud cost banks $27 billion globally, 80% of which was in the Americas. Three of the most common methods for check fraud include mail theft, marketplaces on the dark web for exchanging stolen checks and fake check deposits at ATMs.

While numerous technology solutions exist to combat this issue, and employees are becoming more adept at identifying fraudulent activity, the problem persists. The good news is that one of the most longstanding insurance products, the financial institutions bond (FI bond), is designed to cover the common methods used to commit check fraud.

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Cyber Team