During my speaking events and RDC Forum Seminars, I almost always get into a conversation about the use of Geo-Location, or scenarios where using Geo-Location could help with compliance or preventing fraud. Many of these conversations tend to be with FIs $50 Billion and under in assets. The conversations tend to break do into 1) “Why?” and 2) “How?”.

Why use Geo-Location? I believe there are two primary reasons; Compliance and Risk Management. From a compliance standpoint, FIs need to both “know your customer” (KYC) and adhere to AML / BSA / OFAC requirements. For example, if an RDC client the FI signed up in Atlanta, GA were to start submitting deposits from Mexico on a frequent basis, that should, at the very least, warrant some enhanced due diligence. In addition, FIs would not be complying with OFAC if a deposit were accepted from a banned country or location. Geo-Location could greatly aid in compliance efforts in these examples if it were part of the deposit acceptance, or at least the reporting process. Without it, FIs are essentially flying blind.

From a risk management standpoint, Geo-Location can be used to help thwart account takeovers, as I previously stated and covered in earlier articles and a webinar. In fact, in a recent RDC Forum, a longtime RDC Member took our advice to heart, implemented Geo-Location and has been able to effectively thwart potential frauds.

“How” to use Geo-Location? This answer is not quite as straightforward. It seems most FIs are unsure if their solution even has the capability to do so. -And if it does, it would require a new initiative to determine how it works, how to implement it, what are the rules which determine if a deposit is accepted / rejected / sent for review, etc.. Yes, it would take some thought and effort to intelligently set this up, but I believe the benefits are worth it.

What's your take? -And to see the results of our latest poll on Geo-Location usage, read the article HERE.