Financial institutions have a responsibility to protect customers from fraud where possible. Although educating customers on safe practices, fraud awareness and cyber security best practices is crucial, there are additional tools and resources that credit unions can provide to protect their members further. So that’s why, for Fraud Prevention Month this March, Prairie Payments Joint Venture (PPJV) wants to share some ideas on how financial institutions can help protect customers from fraud, particularly e-transfer fraud.
Fraud involving e-transfer transactions is a fast-growing concern for financial institutions and the general public. With use of e-Transfer increasing each year, the risk is only getting larger. Typically, in an e-Transfer fraud, a criminal intercepts and diverts an electronic money transfer sent via email using stolen personal information or by guessing security answers correctly. This is typically the result of an email transfer being sent by or to a compromised or hacked email account, where the fraudster sees the message or notification about the email transfer and is able to redirect the funds to their own account.
So how can financial institutions protect customers?
There are several fraud protection tools at the disposal of credit unions – a few examples are discussed below.
Two-factor authentication
Two-factor authentication adds an extra layer of security by requiring users to provide two forms of identification, such as a password and a code sent to their phone. This can help prevent unauthorized access to accounts and reduce the risk of fraud. PPJV, for example, is launching a single sign-on (SSO) tool that credit unions can leverage for member multifactor authentication (MFA) and verification, allowing all credit unions to roll out this enhanced security feature even if it is not offered to its members today.
Account monitoring and alerts
Monitoring member accounts for suspicious activity and alerting members if any unauthorized transactions occur is another way credit unions can protect members. This helps members catch fraud early and demonstrates the credit union’s commitment to member safety and security. Using the PPJV fraud and transaction monitoring tools, credit unions can quickly respond to suspicious activities and unauthorized transactions protecting their members’ accounts.
Secure messaging
Another tool financial institutions can provide is a secure messaging system for their customers. Customers can use this system to communicate securely with their financial institution, which can help prevent fraudsters from intercepting sensitive information. This is critical when communicating confidential or transactional data.
Fraud detection and prevention software
Fraud detection and prevention software is another protection that financial institutions can offer to their customers. This software can help detect and prevent fraudulent transactions by analyzing activity and flagging suspicious behaviour.
Information and resources
Finally, financial institutions can provide information and resources on how to cancel Interac e-Transfer transactions and how to spot and report fraud. By empowering customers with the knowledge and tools to protect themselves, financial institutions can further minimize the risk of fraud and help their customers safely and securely use e-Transfer services.