Scott Anchin: Using 'Appropriate Friction' to Stop Scams in Digital Banking

For years, good digital banking meant removing friction: fewer clicks, faster logins and instant transfers. Scammers have proven adept at taking advantage. They create urgency, keep the victim on the phone and move the money before anyone can intervene.

That speed is one of the challenges community banks face. As I wrote in September, most successful investigations and recoveries take shape within the first 48 to 72 hours, and the FBI’s Recovery Asset Team depends on banks acting quickly to freeze funds before they disappear. Community banks can use appropriate friction to extend the time available to detect and mitigate scams.

What 'appropriate friction' means for scam detection in banking

Appropriate friction is targeted. The goal is not to slow every payment. The pause is for the transactions that look like scams: a first payment to a new payee, an unusual amount or a new device paired with an urgent transfer. Many customers will accept a small delay when it improves protection against fraud: Internationally, National Australia Bank found that four in 10 Australians are “extremely willing” for payments to be slower if they are better protected from scammers.

How targeted holds can reduce impersonation-scam banking losses

Imagine a customer gets a call from someone posing as the bank’s fraud department and is told to move funds to a “safe” account. A brief hold on that first large transfer to a new payee gives the scammer’s script time to unravel. The customer hangs up and realizes the story doesn’t add up, or a banker who knows the customer calls to check in. That short window can be the difference between a near miss and a significant loss.

Best practices: How to detect scam transactions in real time (without slowing everything down)

Community banks have more room to add friction than many realize. Digital channels can:

• Hold large first payments to new payees
• Tie warnings to a payment’s stated purpose
• Require stronger verification when risk signals stack

Banks should also ensure account agreements reserve the right to delay or decline suspected scam payments. On incoming payments, existing Nacha rules already let a bank delay funds availability when it suspects a payment was induced through impersonation, though Regulation CC still applies.

Regulatory updates: Why banks need clearer authority to hold suspected fraud payments

Federal law has not kept pace with modern scams. The Expedited Funds Availability Act was enacted decades before today’s wave of check fraud and payment scams. The STOP Payments Fraud Act would give banks an explicit fraud exception and additional authority to hold deposited checks and incoming wire transfers they reasonably suspect are fraudulent.

Prevention over payout: Balancing digital banking speed and fraud protection

Much of the policy debate focuses on who should pay after a scam succeeds. Prevention, however, requires room to pause. Whatever Congress ultimately decides about liability, community banks need practical tools that create time to identify suspicious activity before losses become permanent.

Appropriate friction is not the opposite of good customer service. It plays to what community banks already do best: knowing their customers and leaning on their relationship when something looks wrong. Used carefully, it is one of the most effective tools banks have to stop scams before the money is gone.

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