PHOENIX — Credit and debit card fraud leads other types of fraud at most U.S. banks and credit unions, but most institutions are fighting such activity under constrained resources, according to a survey.
Data released by ISMG Corp.'s BankInfoSecurity.com showed that banks have teams averaging one to five workers, regardless of the institution's size, focused on fraud activity. The findings were released at the BAI Payments Connect conference here on Monday.
Seventy-two percent of the 255 institutions surveyed online in October said they had credit or debit card fraud within the previous 12 months, followed by ATM fraud, 41%, and fraud conducted through automated clearing house channels, 30%. Also, fraud initiated from insiders or employees, wire fraud and other types of payment fraud were each cited by 20% of the institutions.
The majority of respondents, 66%, said their institution has one to five workers assigned to fight fraud. Fifteen percent said they have six to 25 employees on their fraud-fighting team, followed by 5% with 26 to 100, 1% with 100 or more and 6% with no dedicated full-time fraud-fighting employees.
The largest institutions typically have larger fraud-fighting teams, but "the interesting thing is that we found some big institutions that have very small teams," Tom Field, the editorial director of BankInfoSecurity.com, said at the conference. "Across the board, we found that most institutions have relatively small teams fighting fraud."
Overall card fraud rates continue to rise, according to Field, but 44% of respondents said they do not plan to make changes this year in their fraud-fighting budgets or personnel, while 34% plan to boost fraud-prevention spending, 1% said they will decrease spending and 15% said they did not know.
Conference panelist Matthew Speare, a senior vice president at M&T Bank Corp. in Buffalo, N.Y., told attendees his bank is seeing many of the same trends the survey report revealed.
The biggest challenge in battling fraud this year is that banks' budgets are constrained by declining revenues and new regulations, Speare said.
"I see organizations putting more resources into fraud this year, but we're also finding that with regulatory changes like those from [the Dodd-Frank Act] and the Durbin amendment, that we're putting so many resources into finding out what these regulations mean for us, and what to do about them, that we have less and less resources to put into battling fraud," Speare said.
