Speed and Accuracy are Key to Identify and Prevent Cheque Fraud

Customer convenience drives current trends toward digital banking but also accounts for the continued use of cheques. In 2016, 800 million cheques with a total value of $4 trillion were deposited in Canada. Cheques accounted for the second highest (43.5%) of the total value of payment methods. Their ease of use means they will be with us for quite some time yet, however, the continued occurrence of cheque fraud causes multi-layered inconvenience.

Fraudsters try to exploit lags in the cheque clearing process for their own gain. Passing counterfeit cheques or multiple deposits of the same cheque are just a couple examples among many fraud techniques, which are estimated to result in yearly losses of well over $100M across the industry.

How can you protect your organization? Mitigating the related risk depends on identifying fraudulent activity quickly and accurately. Such a task requires a scope and capability that exceeds the limited data available within a single bank. 

Financial institutions (FIs) can best meet the challenges of increased cheque fraud activities through collaboration and advanced technology. Big data analytics that incorporates artificial intelligence (AI) and machine learning (ML) provide a whole picture of each transaction using data across FIs. Cheques first can be examined for legitimacy (are they altered, forged, counterfeit?). Then, the history and authenticity of the accounts upon which they are written are provided, and the availability of funds can be validated. Such a full picture lets the involved banks quickly and accurately determine the validity of a cheque.

Sound complicated? It isn’t. Solutions, like those developed here at Symcor, reduce the risk of loss from cheque fraud. A multi-layered approach, offers quick identification of fraudulent items and activity, with accurate alerts (fewer false positives) — complex and convenient solutions.

Cheque fraud is a serious problem. Learn more about it and possible solutions through Collaboration and Technology in Symcor’s exclusive white paper Reducing the Impact of Cheque Fraud in Canada.