Jack Henry & Associates, Inc. (NASDAQ: JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. Its ProfitStars division announced today a partnership with ACH Alert, a company offering ACH and wire risk management solutions.
As a result of the relationship, ProfitStars has introduced two new solutions, ACH C.O.P.S. and ACH A.L.E.R.T., to financial institutions using its ACH Client™ and Enterprise Payment Solutions (EPS) platform.
ACH C.O.P.S. provides systematic fraud detection to outbound ACH credit and wire entries by requiring transaction-level validation after transactions are received by the financial institution and prior to them being released to the respective payment network. In line with FFIEC's supplemental guidance to its Authentication in an Internet Banking Environment, ACH C.O.P.S. provides out-of-band authentication for ACH credit and wire transfers by requiring customer approval of all suspect ACH and wire transactions prior to transmission, preventing money from going to an account that is not preapproved by the originator.
To mitigate losses from the posting of unauthorized ACH debits, ACH A.L.E.R.T. offers ProfitStars clients actionable, real-time control over ACH debit approvals. Financial institutions can allow each customer to determine their own debit notification parameters, notification method and contact information as well as automate the return and re-credit process. Since corporate customers have only 24 hours to react to unauthorized debits, ACH A.L.E.R.T. provides protection above legacy debit filters and without the setup and maintenance costs.
CapitalMark Bank & Trust is an existing ACH Alert client that prevented more than $500,000 in fraud losses during the first quarter of 2012 alone. The Tennessee-based de novo with $700 million in assets focuses on remotely serving area SMBs.Barry Rich, the institution's chief financial officer, said, "ACH and wire fraud have become increasingly targeted at community banks and more widespread with the growing sophistication of attacks. ProfitStars' partnership with ACH Alert sets a new standard for anomaly detection in processing ACH and wire transactions."
Debbie Peace, AAP, CEO of ACH Alert, added, "ProfitStars clients will enhance their compliance by adding layers of security at different points in the transaction flow to not only prevent fraud losses, but also significantly reduce overhead in how they monitor potential anomalies."
The FBI reported last September it was investigating more than 400 reported cases of corporate account takeover initiated by unauthorized ACH and wire transfers from U.S. business bank accounts, resulting in the attempted theft of more than $255 million. The availability of ACH C.O.P.S. and ACH A.L.E.R.T. enables financial institutions using ProfitStars' ACH Client and EPS platform to deputize companies and only resolve exceptions rather than using algorithms to speculate on potentially suspect activity and over great spans of data.
According to Bill Phillips, EPS group president at ProfitStars, "The reputational risk associated with corporate account takeover and unauthorized debit activity is significant for financial institutions. Adding the ACH C.O.P.S. and ACH A.L.E.R.T. risk management solutions to our proven offerings provides more sophisticated safeguarding against such threats for our clients and will be more of a differentiator for them in obtaining additional business."