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An Evolving Checklist for Mobile Deposit Risk Management

Friday, October 30, 2020 ( /

Mobile Deposit risks and risk management capabilities are evolving. Has your financial institution’s approach to risk management evolved too?
Mobile Deposit has been an increasing focus for the RDC Industry since the concept was first announced publicly at the RDC Summit in 2008. In fact, Mobile Deposit today is the cornerstone of the RDC Industry, garnering most of the spotlight. There are far more Mobile Deposit users than desktop RDC users. The vast majority of the ads we see and hear about RDC are for Mobile Deposit, and there are many financial institutions who bypassed traditional RDC (Desktop Deposit) and only offer Mobile Deposit to their customers.

Over the years, Mobile Deposit Capabilities have improved drastically, the overall client user base is estimated to be at least 70 million (and growing), and overall Mobile Deposit Volumes continue to grow. Likewise, fraudsters are also increasingly targeting Mobile Deposit. This evolution of Mobile Deposit is all the more reason why FIs should pay closer and constant attention to the evolution of Mobile Deposit Risk Management.

This article will serve as a base from which we will expand upon a few risk management capabilities in more detail. For the time being, we will classify several risk management capabilities into “The Basics”, “Nice-to-Haves” and “Up and Coming”.

The Basics
Every financial institution should, at a minimum, have these capabilities to effectively manage the risks of check payments coming through their Mobile Deposit Channel. Over the years, some valid arguments have emerged promoting the concept that, if you have a robust risk management system, you should be able to offer Mobile Deposit to all clients, without limits. As the industry has evolved, most FIs have expanded their offerings to more (or all) clients and have increased limits substantially.

•    Client Eligibility
•    Value and Volume Limits
•    Bank-Wide, Cross-Channel Duplicate Detection
•    Funds Availability
•    Risk Reporting (day 2)

Depending upon your perspective, some of these capabilities may already be part of your “basic” risk management toolset. Most solution providers have done a fantastic job over the past several years of developing / evolving these capabilities and integrating them as a standard part of their overall system. A key area where we’ve seen financial institutions get in trouble with auditors has been where the FI has not used a risk management tool available to them where had they used that tool, they could have avoided a loss or customer incident. Another key area to address: ensure your documented procedures match the system and capabilities you use today. Yes…. Your documentation needs to evolve too!

•    Client Segmentation / Customization
•    Check Verification
•    Industry-Wide Duplicate Detection
•    Auto-Capture
•    Geo-Location & Device Identification
•    Permissions-based roles and responsibilities
•    Soft Limits
•    Review Queue
•    Risk Dashboard / Real-Time Reporting
•    Compliance Reporting

Up and Coming
The next generation of RDC risk management is very exciting, especially with regards to the potential of AI (Artificial Intelligence) and Machine Learning. In a recent webinar we hosted, “How to Defeat the Many Faces of Fraud with AI and Data” (Click Here to view the Webinar On-Demand, or Click Here to Download the Presentation PDF) we discussed how AI can automate many of the manual risk management tasks (think review queues, soft limits, signature verification) performed today, enabling a better risk management approach to more items. The key challenge to this type of technology is establishing the sophisticated decisioning process based upon rich historical data which not only identifies the specific risk events, but also minimizes false positive volumes. 

•    Patterning
•    Image Analytics
•    Change Management
•    AML / BSA / OFAC Integration
•    The Application of AI and Machine Learning

How does your FI Compare?
Which of these capabilities does your financial institution employ? Participate in our Industry Poll to be able to see how your FI compares to your peers and the competition. -And stay tuned for more articles on this subject as we dive deeper into several of the above mentioned risk management capabilities.

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