A Guide to Secure Treasury Management Solutions for ACH and Checks

Payments fraud continues to be a major concern for organizations — and their financial institutions. The 2023 AFP Payments Fraud and Control Survey by J.P Morgan revealed that 65% of organizations were victims of payments fraud attacks or attempts in 2022. Of those, nearly half were not able to recoup those lost funds.

Upon learning of the fraud, the vast majority said their first action was to seek help from their financial institution. Dealing with fraud can be time-consuming and costly, but it may provide an opportunity for financial institutions to promote their treasury management solutions.

It’s a complicated situation because business account holders increasingly want speed in their digital channel and payment options. The ACH Network processed 30 billion payments valued at $76.7 trillion in 2022, fueled in part by the growth of Same Day ACH.

But fraudsters targeting payment systems to commit check and ACH fraud are becoming more sophisticated.

It’s incumbent on financial institutions to focus on speed of payments to meet the needs of their business account holders, but they must also be focused on the security of those payments.

Businesses are looking for technology to help them identify:

• Altered, washed and fraudulent checks
• Unauthorized ACH transactions
• Cyberattacks targeting ACH transfers
• Accidental errors in payment details that lead to payment discrepancies

It’s critical for financial institutions to offer intuitive treasury management solutions that identify potentially fraudulent ACH and check transactions while allowing business account holders the processing speed that is vital to them.

The 12 Elements Which Make Up The Best Treasury Management Solutions For Fraud Prevention And Response

Treasury management for financial institutions provides safe and secure payment solutions for business account holders bringing benefits such as preventing fraud and a quick response when it occurs to protect a business’s bottom line. The best treasury management solutions for secure payments transfers should:

• Easily integrate with a financial institution’s digital banking platform. Look for a digital banking “agnostic” solution that can integrate seamlessly and scale as necessary.
  
• Detect and respond to threats quickly. This is key. Acting quickly is required for businesses to recover funds, prevent further losses and stop discrepancies before they drain a business’s bottom line.
  
• Monitor incoming ACH debits and credits. To stop unauthorized transactions, users should be able to easily add companies to their approved list to allow transactions and, just as importantly, block unauthorized companies. It should also allow users to set transaction limits, frequency and start and end dates.
  
• Improve human accuracy and efficiency through training. It’s not just outside fraudsters leading to financial losses. Human error also accounts for some of it.
• Offer a single front-end and back-end solution for Positive Pay. Look for a provider that offers a seamless back office experience while also offering an intuitive user experience in a single platform.
  
• Detect fraudulent checks. The best treasury management solutions should scrutinize check information and automatically alert users when they find altered or washed payee names, or other types of check fraud. These solutions should also be leveraged at the teller line.
  
• Generate fee-based income. Security and fraud protection has long been a necessary cost center for financial institutions vying to stay competitive in the commercial banking realm. But institutions that offer advanced security business banking solutions are able to acquire a new revenue stream by charging for these services.
  
• Increase commercial deposits. With state-of-the-art treasury management solutions, financial institutions can attract larger commercial accounts who require advanced fraud and security.
  
• Increase acquisition and retention of commercial accounts. Businesses are looking for speed and security in their digital banking solutions. If you’re not providing it, other financial institutions will.
  
• Decrease staff time dealing with fraud. Per the J.P Morgan survey mentioned above, when businesses experience payments fraud or breaches, the first call most of them make is to their financial institution. Heading off these problems before they start reduces the staff hours dedicated to resolving payments fraud.
• Shift financial liability to business account holders. If a user chooses not to verify a flagged ACH or check transaction, they may assume responsibility for any potential losses, minimizing the financial institution’s exposure.
• Include a number of options to meet specific needs. Solutions could include ACH Positive Pay, Check Positive Pay with Payee validation, Reverse Positive Pay, ACH Returns and Notifications of Change, Account Reconciliation, EDI translation and more, depending on the needs and typical transactions of the financial institution’s business accounts.

At Alkami, we are dedicated to providing fraud prevention and security to financial institutions. Solutions like Positive Pay for Check and ACH provide a proactive defense against fraud, ensuring businesses can conduct their transactions safely and securely. Contact us today to learn how our treasury management solution can be used to complement Alkami’s digital banking solutions or your current online banking platform.