Holly Pingatore is Senior Vice President and Director of Deposit Operations at South State Bank. With recent surges in check fraud rates and criminals finding new ways to defraud people, Holly’s focus has often needed to shift, as she explains, in lightning-quick time.
Historically, Holly explains, banks have been in competition with each other to catch fraud first, a situation that has resulted in institutions inadvertently passing losses down the line. Holly advocates for greater intelligence-sharing and openness that could see banks and credit unions fighting fraud collectively in real-time.
Holly discussed the rise of AI in banking and check fraud with Kerry Cantley, VP of Digital Banking Strategy at Mitek:
Kerry: Has the rise in check fraud taken you by surprise?
Holly: It’s very surprising to see the amount of check fraud. If you look at banks our size and smaller, you’re going to hear the same thing from them: I never anticipated I’d been seeing check fraud like this!
Although, really, it shouldn’t surprise us as an industry because, when you think about it, it’s always been an easy way to perpetrate fraud. You don’t ever have to enter the branch, you don’t have to show your face, you can remain anonymous, and you can make a lot of money doing it if you do it successfully. But it has seemed very odd that a payment mechanism that no-one would consider to be an emerging payment mechanism, has suddenly blown up with fraud. What’s happened, though, is that a lot of the technology advances we’ve made in processing checks have actually facilitated that.
Kerry: Where do you foresee changes needing to be made in how banks and other financial institutions approach check fraud detection and prevention?
Holly: Historically, banks have been very private. There’s a lot of information that we’re not always comfortable sharing. And a lot of what we do today in fraud prevention in financial institutions is we catch the fraud first. If you catch the fraud first then you don’t take the loss; you’re passing it to another financial institution. But overall that benefits none of us so I think that banks are going to say, we need to stop passing on these losses from financial institution to financial institution, and we need to share the data we have. Ultimately, we need to achieve more open sharing of information, where we say: we know where we’ve encountered a loss, and we’re going to share that with you so you don’t encounter that same loss.
Ultimately, we all have that common enemy; financial fraud.
Kerry: Do you see a role for AI in helping to solve some of the challenges you face with check fraud?
Holly: What AI has the ability to do, is shift the focus onto the things that are important in that moment. Artificial intelligence helps us get to where we need to be fast - much faster than if we just had a room full of people examining checks. One of the things that is critical to me in check fraud is the ability to shift focus quickly; take your system and say: I know I told you to really focus on this one thing, well now I need you to focus on this instead. And I need to be able to change that focus in minutes because minutes equal dollars in the check fraud world.
Kerry: What did you look for in a partner to help you fight check fraud?
Holly: What I was looking for was the right partner to bring me forward in my check fraud detection ability, and educate me and educate my staff. I would never present myself to be a check fraud expert. But I know enough about banking to recognise the person who can bring me forward in my check fraud detection ability. And that’s what I was looking for - that right partner.
To hear more of what Holly has to say on check fraud, AI, and how financial institutions should respond to rising rates of check fraud, watch the series of short videos we made with Holly.
Hear more industry insights from Holly
About Kerry Cantley - VP, Digital Banking Strategy at Mitek
Kerry Cantley is Vice President of Digital Banking Strategy at Mitek.