Magazine article American Banker

Training Technology and People to Spot Fraud

Magazine article American Banker

Training Technology and People to Spot Fraud

Article excerpt

Byline: Jeremy Quittner

Banks may have trouble performing the higher degree of fraud analysis required by new security rules for payments initiated online, but they do have two strong options: retraining staff, and training software that learns from customers' spending patterns.

National Penn Bancshares Inc. of Boyertown, Pa., claims to have had significant success reducing fraud in automated clearing house and wire transfers using a mixture of technology and human interaction.

"The benefits of transaction analysis are positive particularly because ... [it is] the last and most effective defense we can employ," says Steve Kunkel, senior vice president of operational risk management and loss prevention at National Penn.

Kunkel spoke Thursday in an online presentation sponsored by the security vendor Memento Inc. of Burlington, Mass.

In 2010, National Penn, which has $9 billion of assets and 123 branches, began using a Memento antifraud service to look across silos and channels and detect anomalies in ACH and wire transactions as they occur.

Banks should "gather data as soon as possible when implementing this, because the more historical data analysts have on hand, the fewer false positives there will be," Kunkel says.

He says it is almost impossible for fraudsters to guess the metrics National Penn applies to its transactions to detect aberrations. But the importance of human interactions can't be underestimated, Kunkel says.

Rather than turn responsibility for potential problems over to the bank's fraud loss prevention unit, National Penn made it the responsibility of the relationship managers, since they have closer ties with the businesses and customers involved. …

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