Large institutions take account takeover (ATO) very seriously. For them, ATO is among the top two (along with application fraud) leading causes of fraud losses.
Community banks on the smaller end of the asset spectrum don’t seem to have the same heightened level of concern about ATO. In an informal poll of this segment conducted during the annual DCI* conference, ID Insight found that the vast majority of respondents were moderately or somewhat concerned that their customers would be targets of ATO attempts.
DCI respondents told us that, for now, their personal relationships with customers would allow them to detect suspicious activity quickly and easily. In this they were confident.
However, this sentiment could begin to change as the segment increasingly enhances digital offerings to meet the growing expectations of customers. Community banks will ultimately be doing business with people they may never meet or see. They won’t always be able to rely on their personal, face-to-face relationships to detect potential ATO attacks.
Like the bigger banks, this segment will likely find that digital banking allows faceless identity thieves to hack into accounts and change addresses, emails or phone numbers to disintermediate customers from their institutions. Once in, thieves can use digital methods to quickly drain funds.
An automated, data-driven approach will be the most prudent measure for detecting fraud attempts early and preventing reputational damage and catastrophic losses. This is what is being used at the nation’s largest banks, and it will work for community banks with one or two branches as well.
*DCI is the privately-owned developer of the iCore360® core banking software and related digital technologies serving over 350 financial institutions nationwide.
About the Author
Jack Sundstrom is ID Insight’s Chief Product and Marketing Officer. For the past 25 years he has built advanced analytic solutions on behalf of Fortune 500 clients across a variety of industries including financial services, telecommunications, retail, consumer packaged goods and automotive. Contact him at