It seems like in today's fraud-riddled environment, there isn't a day that goes by where we aren't hearing about some financial institution being hit hard by fraud. When it comes to our credit unions facing payment card fraud, the struggle is real.
So what are some of the major reasons these fraud cases are still so prevalent in the credit union space?
1. Lack of security layers. Card security layers – or lack thereof – are not being built out enough to effectively manage this risk.
Staying on top of what is happening in the fraud world and what technology tools are available to combat fraud will help you build sound security measures to keep your credit union protected from these exposures.
2. Lack of chip technology. Credit unions that have not finished implementing their chip technology are being placed on fraudsters' lists of targets for magnetic stripe fraud.
The cost of implementing chip technology may seem daunting, but if you have not implemented EMV technology, it is not a matter of if you'll get hit with magnetic strip fraud, it is a matter of when.
3. Internal weak links. Bad guys have been able to find internal system weaknesses like employee oversights to capture secure credit union and/or member information.
Training employees about fraud warning signs, prevention methods and response procedures can help immensely. This education should start with upper management and then be shared with the remaining staff and board members.
4. Lack of communication. Many credit unions are not asking other credit unions in their network what they are seeing or experiencing, and are therefore unable to keep themselves aware of threats on the horizon.
Sharing what you are seeing and experiencing with peers will greatly help our industry at large to get our arms around these fraud threats. We cannot close our eyes or ears and think we are immune – we all need to remain aware and prepared!
So what's the bottom line? Your credit union should avidly research, network and plan to implement a payment card fraud prevention strategy that will effectively help protect your institution, employees and members from these looming threats.
Join us at Credit Union Times' Fraud: Don't Let It Happen To Your Credit Union Conference, where you will find the latest tools and techniques for preventing fraud and data breaches; strategies for responding in the immediate aftermath and best practices for restoring reputation, financial stability and information security. This two-day conference is designed for credit union executives, boards of directors and those responsible for your credit union's cybersecurity policy. Register to attend and save $150.
Ann Davidson is vice president of risk consulting for Allied Solutions.She can be reached at 972-447-3703 or [email protected].
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