When you think of a credit union (CU), it’s easy to picture a place that values member relations and face-to-face banking.
While this business model has typically worked to the advantage of CUs, it can also leave some of these institutions ill-prepared for the COVID-fueled shift to digital-first banking — and the risk of online fraud that come with it.
However, many CUs have begun leveraging technologies such as artificial intelligence (AI) and machine learning (ML) to boost 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, thus providing CUs with cost savings.
CUs that use AI platforms to prevent fraud can reduce the number of both false positives and human errors, reducing customer friction and giving staff more time to focus on improving the member experience.
How Do CUs Compare to Other FIs on Data Security?
CUs are working to catch up to the data security innovations of other financial institutions to battle fraud.
As recent research by PYMNTS found, 93% of CUs are funding security, authentication or digital identity — more than double the amount doing so in 2020, and almost triple the amount from 2019.
Last year also saw a sharp increase in CUs investing in fraud and money laundering prevention. While only 69% of CUs said they were investing in fraud prevention innovations in 2021 — falling from 72% in 2018 — that figure is still a marked improvement from 45% in 2020.
AI can also assist CUs in preventing fraud so they can keep doing what they’re best at: delighting customers by meeting their demands and expectations. As scammers step up their game, CUs might benefit from working with AI-based anti-fraud solution providers that can offer strong security while optimizing the member experience.
Rippleshot uses machine learning and automation to detect high risk merchants and fraudulent transactions to help financial institutions protect themselves and proactively stop card fraud. Contact us today to learn more and schedule a product tour.