Consider adding a prevention service for member businesses.
Tier 1 financial institutions command much of today’s small and medium-sized business banking market with about two-thirds of those primary relationships, according to a Raddon study. However, those businesses expressed a readiness to switch to other institutions, such as credit unions, for better services. Adding fraud risk prevention as a business banking service could help steer SMBs to credit unions.
Fraudsters present an ongoing threat to businesses. Scammers typically try to take advantage of new authentication measures, leaks at firms, social media-related data exposures and natural disasters, such as tornadoes, hurricanes, floods, fires and, of course, pandemics.
Developing an increased awareness of the types of fraud schemes threatening business accounts is an important part of mitigating and lowering the risks they pose.
- One year after COVID-19 struck, new TransUnion research shows digital fraud attempts against businesses increased by 46%.
- The Identity Theft Resource Center found that 363 breaches have affected more than 50.6 million people (over 500,000 in retail alone) in the first quarter of 2021.
- The FBI’s most recent Internet Crime Complaint Center report showed phishing as the No. 1 complaint by far from individuals and companies in 2020, with $1.8 billion in business losses directly attributed to phishing. Ransomware costs increased too.
Under Siege from Fraud
Small-business owners face many anxieties operating their companies with limited resources while facing the challenges of volatile economic conditions, attracting customers, and hiring and retaining good employees. Despite all that, found that 75% percent of small-business owners are moving to introduce new products and services to drive growth as they navigate year two of COVID-19.
Scammers could derail that optimism by taking advantage of every opportunity to target financial data by means of payment fraud, identity theft, phishing emails, malware, spoofing and ransomware.
This is an area where credit unions can use their community connections and knowledge to provide extra attention and protection to SMB owners. Building on their common connections can attract businesses and build enduring relationships.
Business Ripe for Change and Protection
SMBs select their primary business financial institution based on the service they receive. A study from ath Power revealed 67% of SMB owners would change financial institutions to obtain tools that would help them better manage and grow their business.
What makes credit unions so distinctive is their member-owned, member-first approach and commitment to their communities’ small businesses. This includes providing tools and services that exceed those offered by other financial institutions.
Credit unions, because they are in touch with local culture and business conditions, can dig into their community roots and help their commercial accountholders develop an increased awareness of fraud schemes and protections against cyberthreats.
One way to help businesses mitigate fraud is by offering fraud prevention as a service—an automated, integrated approach that allows businesses and financial institutions to monitor payment information, sending real-time alerts to flag potentially fraudulent items before a loss can occur.
Advanced Fraud Solutions, High Point, North Carolina, has been a trusted leader in providing fraud mitigation tools for banks and credit unions nationwide for over a decade. In 2007, a group of regional financial institutions in North Carolina, seeking a way to share counterfeit check information between one another, established the premise of Advanced Fraud Solutions. This idea of banks and credit unions contributing bad check data to work together in the fight against fraud was born and has grown exponentially over the years. Today, we have over 650 financial institutions nationwide utilizing a wide variety of fraud prevention tools, yet still subscribing to the idea that sharing high-risk information is the best approach to fighting fraud.