Previously published in Independent Banker’s July 2025 issue!
Fraud! Fraud! Fraud! Every piece of news seems to be about fraud prevention, and rightfully so with fraudsters constantly taking advantage of bank vulnerabilities. What can be done to outsmart them? Several things, but for this piece we’re narrowing it down to two steps.
In this article, we share a two-step strategy for community bankers to fight fraud. Call it “Defense in Depth.” With staff training, customer education, and employing advanced fraud tools, banks can protect their institution and its customers from loss.
Customer Education & Training
An informed customer and trained employee are your first defense against fraud. That’s why an ongoing, updated fraud education program is essential. The good news? You don’t have to start from scratch—use these resources to boost fraud awareness across your team and customer base.
Resources
- The Federal Trade Commission (FTC) – How to Avoid Scams
- The Consumer Financial Protection Bureau(CFPB) – Fraud and Scams
- Independent Community Bankers of America(ICBA) What Every Community Bank Needs to Fight Fraud
- IBT Apps – Fraud-Proof Your Bank: Smart Strategies for Prevention
- Ebook – How Community Banks Can Fight—and Win—Against Fraud
Communication Is Key!
Communicating with customers sets you apart from larger institutions. A simple reminder— that your bank will never request personal information like PINs, passwords, or Social Security numbers by email, phone, or text—can go a long way in preventing fraud and building customer trust.
Tools & Technology Tips
These resources offer great guidance for fraud prevention, but fraud can still occur despite your best efforts. That’s why pairing proactive strategies with effective detection tools is critical. Consider the following recommendations that your bank can implement to stay ahead of threats.
Recommendations
- Strengthen authentication measures.
- Implement multi-factor authentication for digital banking.
- Require OTPs for high-risk transactions.
- Implement strong internal controls.
- Use permission-based access to limit employee usage.
- Maintain segregation of duties to prevent internal fraud.
- Leverage fraud detection features and tools.
- Use reports for high-volume and high-dollar transactions for anomaly detection.
- Ask your core provider about products and services that fight fraud.
How IBT Apps Can Help With Fraud Prevention
At IBT Apps, we tackle fraud head-on with built-in prevention and detection tools in our core and digital banking solutions. From real-time alerts and multi- factor authentication capabilities in our online banking platform to advanced reporting functionality in our core banking system, we’re committed to protecting your bank from harm. Additionally, our partner integrations allow us to offer 360° protection, so you can stay ahead of fraud.
New ebook available now!
If you liked this article, you may enjoy reading our new ebook on How Community Banks Can Fight (And Win) Against Fraud. In this guide, we examine today’s fraud landscape and offer prevention measures as well as strategies for responding to fraud more effectively. Take what you learned here and multiply it by 2! Download your PDF guide today.
Interested in learning more about our fraud tools? Contact us to start a discussion.
