Strength in Numbers: The Benefits of Information Sharing in Risk Mitigation

Battling fraud in today’s environment resembles the itsy bitsy spider climbing up the waterspout: just as you think you’ve reached a point of effective mitigation, a new scam emerges, dousing you in a new attack approach that can wash you out. And then you have to start that risk-mitigation ascent all over again.

But that’s what it takes to battle increasingly sophisticated fraud; an ever vigilant, never tiring tenacity that keeps you pressing forward. It can be draining—on staff, resources, and morale—but fortunately, you are not alone. Every community bank in the U.S. faces the same challenges, and there’s benefit to leaning on one another as we navigate what’s next.

Enter information sharing

Information sharing plays a central role in better arming us against the latest attack. Once one community bank experiences a new scam or approach to an old scheme, providing those details can mean the difference between losses and prevention for another bank.

Digitally, we’re restricted on what information and data we can share, so in-person forums are critical. I’m a huge advocate of getting to know your peers within the industry. It’s about creating a circle of trust in which all parties are willing to share what they’re seeing on the fraud front.

Building your fraud network

However, the biggest hurdle to sharing information lies in finding the right contacts and forums. From experience, there are three ways to start building those connections:

1. Empower fraud teams by investing in them and getting them engaged with information-sharing groups. Bank leadership should support fraud teams in seeking out opportunities to engage with other banks in the community, in vendor or network groups, with local community banking organizations, or with ICBA at the national level. The executive team sends a message by proactively asking the fraud team to identify these opportunities so they can be better equipped to protect your bank.

2. Seek out resources from the card networks directly. Card networks have a shared interest in mitigating fraud. Fraud teams, reach out to your Visa or Mastercard representative and find out who you need to talk to so you can get engaged in the right forums. In addition, ask the card networks if they have reporting mechanisms to help you in monitoring bad actors. Ask them what’s available today and/or request they consider making information available.

3. Engage with ICBA. ICBA creates forums to connect community banks nationwide. Take advantage of that ready-built community. Attend ICBA LIVE. Join ICBA Community. Complete ICBA fraud related trainings. Each resource connects you to like-minded people who are ready to share information that supports our network of community banks.

At the end of the day, fraud is happening. Bad actors will never stop. And combatting fraud will continue to be a full-time job for people employed in it. Empowering our fraud teams and departments with the tools they need, including peers in this ongoing battle, will go a long way toward protecting your bank. By working together and sharing what we know, we become a mighty team, and collectively, we might just be able to make it to the top of that waterspout and stop fraud before it hits.

To mitigate card fraud losses, sign up for ICBA Payments Fraud Loss Protection Plan (FLPP) at icba.org/flpp.