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CheckDetect at a Leading North American Bank

CheckDetect at a Super-Regional Bank with ~$30B+ in Assets-2

Industry

Financial Services

Challenge

At the bank, the fraud detection system was creating an unintended consequence: holds placed on deposited checks to prevent fraud were also restricting access to funds for tens of thousands of customers. The bank needed a more effective way to differentiate high-risk deposits from legitimate ones, reducing unnecessary customer friction while still containing fraud.

Results

CheckDetect enables banks to protect against fraud while minimizing customer disruption. By applying item-level risk scoring at deposit, the bank can make more targeted hold decisions, focusing controls on higher-risk deposits while giving customers faster access to their funds.

Key Product

CheckDetect

www.validadvantage.com
46%
Reduction in False Positive Hold
55%
Additional Fraud Exposure Idnetified
3
Channels (ATM, Mobile, Teller)
1520096943880

The False Positive Hold Problem

Across all three deposit channels, the vast majority of holds were placed on items where the check was ultimately not returned as fraud.

 

Mobile Channel Example

Items with Hold:  73,800
False Positive Hold: 65,160
False Positive Rate:  88.3%

$36.8M in fraud exposure sat under hold, representing 51.1% of total fraud exposure. Yet only 7.1% of those holds caught actual fraud.
 

The Challenge

Without item-level risk scoring, the Bank’s hold policy had limited ability to differentiate between deposits based on their underlying risk. As a result, the bank faced two challenges:

  • Over-holding: Low-risk deposits receiving holds, creating unnecessary customer      friction.
  • Under-protecting: High-risk deposits sometimes cleared without intervention

The CheckDetect Solution

VALID Systems deployed CheckDetect; real-time loss alerting model across the Bank's banking channels. Each incoming check deposit receives a real-time risk score, enabling the Bank to apply holds more precisely to high-risk deposits while minimizing holds on good checks. 

False Positive Reduction Scenario  
Mobile Channel Example 
Channel % of Items
w/ Deposit & Hold		 Items w/
Deposit & Hold		 % Holds w/
No Return		 Items w/Hold & No Return Fraud Exposure $
w/ Hold
Mobile 8.6% 73.8k 88.3% 65,160 55.0%

 

The Results

  • $36.8M in fraud exposure under active hold monitoring, protecting 51.1% of total
    exposure
  • 7.2.8M is Charge off loss Reduction 

VALID CheckDetect enables banks to take a more targeted approach to fraud prevention, protecting the balance sheet while minimizing customer disruption. By applying item-level risk scoring at the time of deposit, banks can focus holds on higher-risk deposits while allowing customers to access their funds faster.  

How CheckDetect Works
  1. Real-Time Scoring
    Every check deposit is scored by an XGBoost classifier the CheckDetect model at the moment of deposit across banking channels.
  2. Item-Level Risk Assessment
    The model evaluates account behavior, balance history, return patterns, and deposit characteristics to generate a precise fraud probability score.
  3. Targeted Hold Decisions
    Holds are applied only to deposits scoring above defined risk thresholds, dramatically reducing false positives while maintaining fraud protection.

Reduce False Positive Holds with CheckDetect
VALID Systems deploys CheckDetect for financial institutions of all sizes. Our check risk models are trained on your data, validated against your fraud patterns, and deployed in weeks not months.

 

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