How secure is your Credit Union from third-party frauds?

Third-party frauds has been on the financial industry’s radar throughout 2020, with account takeover and account opening fraud representing high opportunities for risk.

Today more and more personally identifiable information is available on the dark web due to data breaches and phishing scams. COVID-19 has created both opportunity—increased online presence and interaction—and need—in the form of financial distress
for Credit Unions and their members—when it comes to third-party fraud.

In recent years, Credit Unions have increasingly developed third party relationships to meet strategic objectives and enhance member services. However, outsourcing critical business functions increases the risk of third-party frauds in Credit Unions. So, how secure is your credit unions from third-party frauds?

How does third-party frauds impact Credit Union?

Third-party fraud—generally known as identity theft— occurs when a malicious user uses another person’s identifying information to open new accounts without
the knowledge of the individual whose information is being used.

Third-party relationships can be invaluable to Credit Unions and Credit Union members. CU is the main target for third-party frauds given the amount of personal information they require from credit union members, from home addresses to Social Security
numbers.

The biggest challenge is that fraudsters are getting increasingly sophisticated. They keep varying their modes of attack, so businesses can no longer rely solely on known attack parameters and patterns identified through past cases. Existing solutions need
to evolve and use their data to predict and identify fraud patterns before they happen.

Fraud prevention strategies

1. Establish a fraud policy

2. Enhance control for digital product enrollment

3. Effective member account verification

4. Monitoring activities & investigating suspicious events

Fraud Hurts. Time to Fight Back

Insight Consultants can help your Credit Union address all aspects of fraud management, including the collection of data from all possible sources, data analysis, and investigation. With advanced analytical solutions and next-generation security options, we can help your firm stay one step ahead of frauds.