How Credit Unions Fight Online Fraud

When you think of a credit union (CU), it’s easy to imagine a place that values ​​member relationships and face-to-face banking.

While this business model has generally worked to CUs’ advantage, it may also leave some of these institutions ill-prepared for the COVID-fueled shift to digital-first banking – and the risk of online fraud that comes with it. .

However, many UCs have begun to leverage technologies such as artificial intelligence (AI) and machine learning (ML) to bolster their risk management efforts. For example, AI systems can search large amounts of data to protect against the threat of synthetic account fraud without the need for manual review, providing cost savings to UCs.

UCs that use AI platforms to prevent fraud can reduce false positives and human errors, reduce friction with customers, and give staff more time to focus on improving customer service. members’ experience.

How does UC compare to other FIs on data security?

UC strives to catch up with the data security innovations of other financial institutions to combat fraud.

As recent research from PYMNTS revealed, 93% of UCs fund digital security, authentication or identity – more than double the amount in 2020 and almost triple the amount in 2019.

The past year has also seen a surge in the number of CUs investing in fraud and money laundering prevention. While only 69% of CUs reported investing in fraud prevention innovations in 2021 – down from 72% in 2018 – that figure is still a marked improvement from 45% in 2020.

AI can also help UCs prevent fraud so they can continue to do what they do best: delight customers by meeting their demands and expectations. As scammers step up their game, UCs could benefit from working with vendors of AI-based anti-fraud solutions that can offer enhanced security while optimizing the member experience.

If you want to know more about this topic, download a copy of the Credit Union Tracker, a PYMNTS and PSCU collaboration.



On:More than half of US consumers believe biometric authentication methods are faster, more convenient and more reliable than passwords or PINs. So why do less than 10% use them? PYMNTS, in collaboration with Mitek, surveyed over 2,200 consumers to better define this perception in relation to the usage gap and identify ways companies can increase usage.

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