The number of paper checks being converted to ACH transactions is growing exponentially, making the channel more enticing to thieves and increasing instances of fraud. It's a problem that's starting to get the attention of the industry, says Nick Holland, a senior analyst at Aite Group. He recently surveyed 23 U.S. banks and credit unions and found that 95 percent cited ACH fraud as an important or extremely important concern.

The driving factor is that ACH is being used in ways not originally intended and that security around the channel has not kept up. "Fraud moves to the point of least resistance," Holland says, and as the access to the ACH network grows and fraudsters' sophistication advances, the ACH network may be increasingly targeted.

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