Fraud Increasing with Paperless Transactions; Banks May Not Be Prepared
According to a recent survey conducted by TD Bank, 88% of financial professionals believe payments fraud will become a bigger threat in the next two to three years, but only 10% of the respondents felt there was a solution to this problem.
“Even as the threat of payments fraud increases, many firms are not ready to thwart what could be an influx of cases within the next 24 months,” said Rick Burke, Head of Corporate Products and Services, TD Bank. “Corporate treasurers need to have conversations with their banking partners to establish controls within their payments processing and accounts, and find better ways to implement layered defenses and detect fraudulent activity.”
The survey, which polled finance professionals at the 2016 NACHA Payments Conference, said organizations need to pay particular attention to payments security as they move from paper to electronic systems. Nearly 20% of the respondents said their companies already have paper-free systems. 32% said they will implement this system in the next one to two years, and 42% said they will be paper free in three years or more.
Even though paper-free transactions are years away for some companies, nearly half (49%) said real-time payments are “critical” for their business. 47% reported that instant payments would be nice but are not yet critical.
Most respondents agree that self-service and commercial finance capabilities are imperative, though, with 74% identifying these capabilities as “very important.”
“As commercial finance professionals look to improve time and process efficiencies and manage cybersecurity threats, they should look to collaborate with their bankers,” Burke said. “The faster payments move, the riskier they become, so it will be critical for financial institutions to continue to provide both education and new solutions for many years to come.”