Aite outlines fraud management priorities for US banks

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BOSTON - As fraud increases with the recession, financial analyst Aite has published a report into the strategies and budgets US banks are expected to employ to combat fraud over the next three years.

The research expects all fraud types to become higher priorities. Automated clearinghouse frauds are expected to see the greatest rise, while frauds using customer ATM cash machines are expected to cause the most losses.

Enterprise-wide case management was listed as the most important priority when implementing fraud software, although only 39% of firms said they had such arrangements in place.

"The good news is that funding for addressing fraud management is seen as mission-critical by financial institutions, and is unlikely to be scaled back despite current economic pressures," says Nick Holland, a senior analyst at Aite and author of the report.

"Fraud management departments are centralising, investing in monitoring technology and continuing to place a strong emphasis on the human element as the most critical component in fraud mitigation," he says.

The 31-page survey interviewed fraud managers at 23 of the top 150 US financial institutions, asking about fraud priorities and the budgets in place to address them.