Georgian Bank selects Mitek for cheque fraud detection

Source: Mitek Systems

Mitek Systems (BULLETIN BOARD: MITK), a leading provider of Image Analytics and Pattern Recognition software, announced that it has implemented a check fraud detection solution at Atlanta-based Georgian Bank.

The National Check Fraud Center estimates that check fraud and counterfeiting nationwide generate $10 billion in annual losses and that the total continues to rise at an alarming rate. The National Consumers League says complaints about check fraud grew 60 percent in 2007 and that the average victim loses $3000 to $4000. And the Reuters news agency reported this month that international authorities had seized $2.1 billion in counterfeit checks in one series of raids alone.

Mitek's Fraud Protect application reviews checks for counterfeit designs as well as missing or fraudulent signatures. The signature validation component has earned four U.S. patents for its unique method of assigning a numeric score to each reviewed signature.

Previously, Georgian Bank used its core banking system and human review to detect fraud. The core system could identify accounts that require two signatures but a deposit specialist had to review all the checks presented to make sure they actually had two signatures.

The system didn't offer essential features such as comparing examples of good checks with the check being reviewed. Today, all of the bank's checks are evaluated by Fraud Protect.

"What we like about Fraud Protect is that the system and its operator can compare an image of a good check with a questionable check side-by-side on screen," says Katie Silva, Georgian Bank's senior vice president of operations. The most common problems with checks are missing signatures and the wrong check stock - which can mean the check is fraudulent.

Fraud Protect's reference library of check stocks and signatures is key to its fraud detection process. The product maintains a library of each account holder's recent check images. It is the images in the library that are compared to the incoming checks.

Daily the system flags about 10 percent of incoming checks for further review. This includes all large amount checks since these checks have a greater opportunity for loss. A single deposit operations specialist spends about two hours per day reviewing the suspect checks. Both the operations specialist and Silva say Fraud Protect is fast and easy to use.

Typically several checks per day have actual problems which require action, such as correcting a missing signature. "When we identify such a check, the first thing we do is call the customer and let them make the decision whether to pay the check or not," says Silva. "That's how Fraud Protect helps us deliver on our 'high-touch' customer service commitment."

Mitek's Fraud Protect works in parallel with the core banking system. No separate check scanning process is required. The same check images are sent to the core system for processing and storage as well as to Fraud Protect for a much more robust fraud analysis. Thus, the product provides powerful fraud protection while minimizing the additional time, hardware, software and operating expense associated with its benefits.

The patented product compares 120 points on the live check with the same characteristics on the reference check. For example, if the bank logo is in the wrong location, the check will be flagged for operator review. Silva has been very pleased with the results. "We believe it is our job to help protect our customers against fraud and Fraud Protect helps us get that done."

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