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CheckDetect Decreases Mobile Deposit Losses by 87%

Secure Check Exchange

Industry

Financial Services

Challenge

A regional bank had suffered significant check fraud losses. Changes to risk policies at the teller line and delayed availability at the ATM brought relief to those channels. Mobile losses spiked. The need was urgent to better identify fraud without having to further delay funds or manually review each item.

Results

CheckDetect enables banks to protect against fraud while minimizing customer disruption. By applying item-level risk scoring, the bank was able to place holds on all items beyond a high-risk threshold. The impact was immediate. Lower manual review queues, significantly decreased fraud losses.

Key Product

CheckDetect

87%
Reduction in check fraud loss
<1.0%
deposits alerted on
<3
months to implement
1520096943880

The Channel Problem

Check deposit funds availability policies, risk practices, and systems are not all created equal especially across channels. 

 

 

The Challenge

Having solved for their check deposit fraud issues in two channels, they remained exposed in a third. As a result, all of the risk had moved to the vulnerable mobile channel and the bank was unable to place sophisticated risk strategies in place. Two main issues remained:

  • Fraud Identification: Internal risk rules were not catching bad actors in mobile the way they had in other channels.
  • Vendor Solutions: Current vendor solutions deployed in the teller line were not available in mobile deposit and left a gap.

The CheckDetect Solution

VALID Systems deployed CheckDetect; a machine learning, deposit fraud model for the bank's mobile channel. Each incoming check deposit receives a risk score, enabling the bank to apply holds more precisely to high-risk deposits while minimizing holds on good checks. 

The Results

  • Deposit losses in mobile decreased by 87%
  • Fraud capture rate soared from 50% to > 90%
  • Fraud loss rate decreased from 0.20% across mobile deposits to 0.02%

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. Scoring When You Need It
    Whether at the point of presentment through real-time API's, throughout the day via X9 deposit files, or end of day batch files CheckDetect delivers results when your fraud teams require it.
  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 months not quarters.