FedNow℠ Set To Launch In Less Than One Year
Have You Prepared Your Financial Institution For The Potential Consequences?
The Federal Reserve has announced a new, narrow launch window for its FedNow real-time payments service. After years of development, testing, pilot programs and delays, FedNow will officially go live between May and July of 2023.
Fed Vice Chair, Lael Brainard said of the new launch window, “The FedNow Service will transform the way everyday payments are made throughout the economy, bringing substantial gains to households and businesses through the ability to send instant payments at any time on any day, and the funds being immediately available to recipients to make other payments or manage cash flow efficiently.”
While the implementation of the instant payments service will undoubtedly be welcomed by businesses and consumers, financial institutions must prepare now for its potentially negative consequences, namely fraud.
Since real-time payments allow for instant fraud, financial institutions must be aware of, and prepared for potential threats. However, while much of the anti-fraud focus will be on mobile/digital payments and transfers (as it should be), “traditional” core banking activities could be targeted by fraudsters as well.
Because of the near instant clearing that FedNow will offer, a fraudulent check deposited in an ATM could theoretically be immediately withdrawn as cash. In the FedNow era, this form of check fraud could be performed dozens of times per day, by a single fraudster.
Of course, this is just one small example of a core transaction threat. Threats that may not be fully understood or properly defended against until it’s too late.
There are, however, highly effective solutions to combating transactional frauds, both digitally and in-person that are available, and should be implemented, right now, ahead of FedNow.
Fed Vice Chair, Lael Brainard said in his statement, “The time is now for all key stakeholders to devote the resources necessary to support instant payments.”
And that support must include the implementation of real-time fraud detection and prevention tools.
ToolCASE offers financial institutions the most highly regarded, remarkably effective real time artificial intelligence-backed fraud detection and prevention solutions in the industry.
Its Ai technology allows fraud teams to not only potentially detect fraud across all channels as it’s happening, but to stop it before it’s too late.
Real-time fraud detection and prevention will be critical when FedNow℠ is implemented in less than a year.
ToolCASE’s technology is the preferred and proven anti-fraud solution in a world where banks and credit unions could soon be overwhelmed with real-time threats.
Discover the ToolCASE suite of real-time AI fraud detection and prevention technologies, and how they can best protect your institution from financial frauds by downloading our FedNow whitepaper, HERE
Or, contact ToolCASE now, by calling 1-888-TOOLCASE
Read more of Vice Chair Brainard’s comments on the FedNow launch, HERE