The top 10 emerging fraud risks

Emerging fraud risks will require credit unions to adopt rigorous, cross-channel fraud monitoring strategies, a CUNA Mutual risk expert said Monday.

Ann Davidson recommended taking a holistic view of fraud, realizing that a particular fraudulent act may not directly or immediately result in a loss, but may later manifest itself in another form.

Davidson presented a top 10 list of emerging fraud risks facing credit unions today:

1. Phishing, smishing and vishing
2. ID fraud
3. System intrusion
4. Cyber crime
5. Data breaches
6. Transaction fraud
7. Mortgage fraud
8. Internal fraud
9. External fraud involving numerous and varied scams
10. Other emerging risks, involving compliance and regulation, new account, existing account, and check image home banking fraud.

Davidson said the best way to thwart fraud by preventing it is by educating employees and members. Identifying root causes and using a fraud management system can prevent or minimize risks.

She offered these preventative tips:

• Implement best practices that engage all employees.
• Measure savings by the effectiveness of the loss prevention tool.
• Share information to help other credit unions and members.
• Be proactive–it pays off.
• Ensure prevention processes and tools are in place and delivering intended results.
• Find the critical balance between risk management and member service.
• Implement a cross-channel fraud prevention solution on all transactions and at the member account level.