Fraud prevention firm Mitek expanded a partnership with payments processor Alogent.
The collaboration will see Alogent integrate Mitek’s Check Fraud Defender (CFD) into its Unify deposits automation solution to prevent the rising threat of check fraud, according to a Wednesday (Aug. 21) press release.
“According to the annual Federal Reserve Financial Services Survey, in the United States, forms of check fraud including forgery and counterfeiting account for 31% of all bank fraud,” the release said. “In fact, in 2023, check fraud losses surpassed $20 billion and are expected to be even higher in 2024.”
Technological advances such as artificial intelligence have helped fraudsters generate counterfeit checks, alter legitimate checks, and forge signatures, underlining the need for better verification tools, according to the release.
One customer reduced their losses by $16 million after using CFD’s combination of imaging science, machine learning and AI to analyze checks from all channels in real time, per the release.
“As transaction fraud tactics become more sophisticated, effective mitigation is essential to safeguard our clients’ operations,” Alogent Vice President of Product Management Ashish Bhatia said in the release. “By integrating Mitek’s Check Fraud Defender with our Unify platform, we provide our bank and credit union partners with advanced AI-driven tools for risk mitigation across all deposit channels, while maintaining a seamless user experience for account holders.”
Checks remain a preferred payment method for several organizations, even amid the rise of digital alternatives.
The PYMNTS Intelligence report “The State of Real-Time Payments” found that checks constitute a portion of B2B transactions across a range of industries. In real estate, 21.2% of B2B transactions involve checks, while retailers depend on checks for 15.2% of their B2B payments.
The Association for Finance Professionals, meanwhile, found that 75% of treasury professionals acknowledged the ongoing use of checks within their organizations. Thirty-four percent said checks accounted for over a quarter of their payment transactions.
Amid this check use, check fraud remains a persistent threat. As PYMNTS reported last year, “the manual nature of paper checks introduces a higher risk of errors that can damage relationships with vendors, suppliers and even employees. Not only that, but their physical characteristics are an attractive attack vector for fraudsters, and they can be easily lost or stolen in transit.”
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