One challenge fraud prevention experts face is identifying truefraudulent transactions in a sea of false positives. Too often, itis the credit union member noticing a slew of fraudulent chargesbefore the credit union notices rare transactional behavior. Or thecredit union notices uncommon purchases that were in fact initiatedby the member, but due to a lack of updated contact informationresults in the credit union turning off the member's debit card asa precaution.

In either scenario, the credit union is receiving calls from amember who is unhappy. The member either has a disruption in accessto their money, or they are trying to reclaim money stolen fromtheir account.

As for the credit union, this is more than just a member serviceannoyance. In the case of theft, the credit union faces monetarylosses. As for the disturbance in transactions, this could resultin a potential loss of a credit union member.

The Power of Fraud in the Hands of Credit UnionMembers

One way to better combat debit fraud is to turn to the membersthemselves to help identify legitimate transactions. By narrowingthe number of suspicious activities to navigate, a credit union'sfraud department is able to focus on the true threats as opposed tomanually sifting through and detecting suspicious transactions.

Offering a proactive approach to fraud also helps memberloyalty. The member notices that their credit union has their bestinterest in mind and truly cares about their time and money.

Although many core providers have fraud analytics alreadyintegrated into their system, more financial institutions areleveraging the popularity of mobile banking applications and theubiquitous presence of texting to verify suspicious transactions inreal-time. These systems ask the member to confirm transactionsthat meet certain criteria via their cell phone before processingthe transaction.

Thanks to the ease of working with your credit union's mobilebanking application, as well as SMS messages, email and callalerts, the system can notify credit union members of anysuspicious activity. The alerts give the member a chance to decidewhether those charges are indeed fraudulent and allow them to takeaction of their own account with immediate member verification bychannel of choice or all channels, including interactive voiceresponse. In addition, such solutions provide notification ofreal-time activity, where the member can decline the firsttransaction that was not initiated by them.

Incorporating solutions with fraud notifications also minimizesfalse positives. In other words, the notifications the member getsare always of importance and they are not bombarded withnotifications that are not of interest to them.

Increasing Event Management Without IncreasingHeadcount

The extra layer of security and fraud management allows creditunions to be able to notify members both within and outside ofbusiness hours, instead of hiring on additional staff to monitoraround the clock. This alleviates the accumulated cost in the areasof training, salary and benefits. Not to mention, the decrease inthe detrimental costs makes up for fraudulent charges.

This also grants current fraud department representatives theopportunity to work hours that coincide with the credit union'shours. Although a call center is important for members to havereassurance that their account has not been further compromised,they feel at ease knowing that they were able to take action ontheir own account thanks to the notification and real-time responseoffering.

The overall goal for credit unions is to establish and maintaina relationship with their members by providing peace of mind thatthe member's money is in good hands, and to ensure the membercontinues and expands their business relationship with the creditunion. By providing additional banking offerings, the member canfeel they have the same capabilities of individuals banking withthe megabanks while enjoying the notable care provided by creditunions.

Chris Renshaw is president/CEO ofREDI Enterprise Development, Inc. He can be reached at 205-608-2121or [email protected].