A new era in consortium-driven check fraud prevention
Despite the digital nature of much of our day-to-day payment activities, checks are still an active part of the payment ecosystems, particularly for businesses and government agencies. This means that check fraud is still an active threat - according to the US Treasury and industry data, attempted check fraud has been on the rise in recent years and still costs financial institutions billions of dollars annually.
Fraud rings share intelligence and coordinate attacks at scale, which allows them to exploit the fact that many banks and credit unions still conduct their anti-fraud operations in a silo. To ensure that financial institutions’ defenses can continue to block new and emerging threats from these actors, financial institutions must embrace the collaborative approach their adversaries use. Shared fraud intelligence and consortium-driven defenses serve to strengthen all members of the industry together and empower them to understand and respond to threats more quickly and effectively.
A smarter, stronger approach: the fraud consortium
What is shared fraud intelligence?
“Shared fraud intelligence” refers to pooled, fraud-related data and analysis across multiple financial institutions, shared in a privacy-compliant and secure manner. The institutions sharing the data are referred to as a consortium, and benefit from access to data with broad visibility across the entire financial ecosystem. With this consortium model, when a fraud attempt occurs at one member institution, all others in the consortium gain knowledge of the attempt in real-time, strengthening their collective defenses.
How consortium fraud detection works
Within a fraud consortium, data points from billions of transactions across all channels, like mobile, ATM, and branch transactions, are aggregated and analyzed. This collective intelligence is then used by advanced machine learning models that continuously refine the fraud scoring and decisioning process.
The shared algorithm may identify specific fraud trends, and they can also help institutions react to specifics, like if a counterfeit check is flagged at one large bank and later is presented at a smaller credit union, that credit union has the intelligence needed to block that specific item instantly. That’s the power of real-time check fraud detection powered by consortium data.
Consortiums vary in what external signals are included (like data from the dark web), the breadth of members included, how close to real-time the data they provide is, and their AI and machine learning capabilities. For the most effective fraud defense, choose a consortium with all of these capabilities.
Mitek’s Check Fraud Defender
With Check Fraud Defender, Mitek is leading the consortium approach to fraud defense with a purpose-built model that provides institutions the ability to:
- Access fraud insights across peer institutions, including billions of transactions
- Detect altered checks and duplicate presentments in real-time and stop fraud before the check is deposited
- Incorporate data signals from criminal marketplaces to identify stolen or forged items, as well as compromised data, early
- Continuously improve detection accuracy with constantly updated “shared truth” made stronger by every participating institution
Check Fraud Defender provides operational intelligence that helps institutions fight fraud more effectively than they can alone.
Collective defense in an ever-evolving threat landscape
The limits of siloed fraud tools
Financial institutions have long relied on their internal systems to fight check fraud. While these systems have proven effective at stopping many threats, their view has been limited to only the types of fraud the institution itself has anticipated or previously encountered.
This creates blind spots for fraudsters to exploit - like targeting multiple institutions with the same altered or counterfeit check. Without shared intelligence, the likelihood that one or more institutions will process the fraudulent item is increased. It also creates a less level playing field, with fraudsters knowing that the resources a smaller credit union might have to combat fraud are often less robust than those at a larger institution, making these smaller institutions more likely targets.
Closing the gaps with shared fraud intelligence
Consortium fraud detection eliminates these vulnerabilities. Cross-institution visibility and shared fraud intelligence allow financial institutions to:
- Identify items flagged elsewhere: once a counterfeit check has been rejected by one bank, all network members are aware that the check was flagged, preventing it from being accepted at another member institution
- Enable cross-channel analysis: irrespective of whether a fraudulent check has been deposited at an ATM, via remote deposit capture, or in a bank branch with a teller, the consortium ensures it is flagged for recognition at every institution and on every channel
- Catch “on-us” fraud attempts: these occur when a fraudster tries to pass a fraudulent check drawn on the same institution, and while it might not seem intuitive for a bank to need consortium defenses in this situation, the attacks are often repeated in different geographies and/or different channels, and the real-time consortium data can supplement their internal defenses
Modern fraud schemes often involve duplicate presentments, account takeovers, and remote deposit capture (RDC) fraud, with checks deposited through multiple channels and/or banks, making this shared data invaluable.
Fraudsters don’t work alone - neither should you
Organized fraud rings now communicate, share stolen data, and coordinate their tactics more effectively than ever. They’ve embraced data sharing, AI, and machine learning-powered tools that enable them to generate better fakes, and secure real-time communication channels (like Discord, Telegram, and WhatsApp) to extend their reach and expand their operations.
In contrast, financial institutions have historically fought against these actors alone, with highly varying levels of technical sophistication. With shared fraud intelligence, institutions can now flip the script and give themselves the same scale, collaboration, and real-time communication advantage that criminals have historically enjoyed.
Recognized by industry leaders
The efficacy of consortium models has been validated by industry leaders for the real-world value it delivers. In 2024, Mitek’s Check Fraud Defender received top honors at the Datos Insights Fraud and AML Impact Awards, in the category of Best Transaction Fraud Monitoring and Decisioning Innovation.
Mitek’s recognition demonstrates that the power of real-time fraud detection powered by consortium intelligence is making an impact on the industry. Institutions can now intervene immediately, instead of reacting to fraud after losses have already occurred. The benefits are immense for institutions and their customers alike.
Expand your reach without adding complexity
Integration made easy
Banks and credit unions are already juggling many complex fraud prevention tools, compliance solutions, and core banking systems. Adding yet another layer may feel daunting.
Check Fraud Defender was designed with ease of integration in mind. The platform feeds real-time fraud risk signals directly into an institution’s existing workflows - without requiring a full tech stack overhaul.
Flexible deployment
Multiple options exist for integrating shared fraud intelligence. These include MiControl, Mitek’s intuitive fraud-management console for real-time monitoring and response; fraud orchestration platforms that offer seamless integration with existing decisioning and case management tools; or API- and cloud-hosted solutions that are scalable to grow with the needs of an institution.
Flexible deployment allows for institutions of all sizes, whether they’re community banks or operate on a national level, to be able to join the consortium without disrupting their operations. The result is stronger defenses for everyone, with less friction.
Why shared fraud intelligence is the future of check fraud prevention
The future of check fraud prevention will require consortium-level collaboration and shared fraud intelligence to protect against scaled threats that target our financial institutions.
By participating in consortium models, institutions gain:
- Broader visibility into fraud attempts across the entire industry
- Faster detection and intervention capabilities, and the ability to stop fraud in-session
- Improved accuracy of detection, with continuously updated collective intelligence
- Greater overall resilience against organized fraud networks
The consortium model presents a paradigm shift in how the entire financial industry can now protect itself, its customers, and the integrity of the entire financial system against fraud networks.
Conclusion: power in numbers
Organized fraud networks have already discovered the value of collaboration. Now, financial institutions have the opportunity to do the same. Shared fraud intelligence, delivered through consortium-driven platforms like Mitek’s Check Fraud Defender, provides institutions an opportunity to level up their defenses against fraud with an additional layer of protection.
The benefits, like real-time detection, industry-wide visibility, and collective defenses against organized fraud, are significant for institutions of all sizes. Everyone benefits from the breadth and depth of knowledge and resources they get when fighting together instead of fighting alone.
Are you ready to see how shared fraud intelligence can bolster check fraud defense at your institution? Discover how Mitek's Check Fraud Defender empowers institutions like yours to stop fraud before it happens, without adding complexity to your operations.
About Megan Brooks - Sr. Product Marketing Manager at Mitek
Megan Brooks is a Sr. Product Marketing Manager at Mitek.