From Checks to Cybersecurity: Fraud Trends from the FRFS Risk Officer Survey Every Bank and Credit Union Should Know

The Annual Federal Reserve Financial Services (FRFS) Financial Institution Risk Officer Survey recently released its 2024 findings, offering a comprehensive look into the evolving fraud landscape impacting banks and credit unions across the US. With insights from over 360 senior risk officers, the report highlights how fraud is increasing in both frequency and complexity. From legacy payment channels like checks and ACH to emerging threats in digital platforms, the data underscores the urgent need for financial institutions to modernize fraud prevention strategies and strengthen cross-channel defenses.

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Fraud Is Shifting—But Not Disappearing

While digital transformation continues to reshape the financial services landscape, traditional payment methods remain highly vulnerable to fraud. The 2024 FRFS Risk Officer Survey reveals that fraud attempts and losses are not only persisting, but increasing across several legacy channels, highlighting the need for renewed attention and investment in fraud mitigation.

• Checks saw a 10% increase in fraud attempts and a 5% rise in monetary losses, underscoring the continued exposure of paper-based payments.
• ACH fraud attempts rose by 9%, surpassing credit card fraud for the first time, signaling a shift in fraudster focus on bank-to-bank transactions.
• Debit cards experienced a 6% increase in both fraud attempts and actual losses, reflecting their widespread use and susceptibility to compromised credentials.
• Instant payments, in contrast, showed a 3% decrease in both fraud attempts and losses, suggesting that newer payment systems may be benefiting from stronger built-in controls and fraud mitigation features.

These trends point to a growing need for banks and credit unions to reevaluate their fraud prevention strategies, especially for high-volume, high-risk payment types. Institutions must consider not only the frequency of fraud attempts but also the evolving tactics used by fraudsters, who increasingly exploit the gaps between legacy systems and modern digital solutions. A proactive, integrated approach to fraud detection is no longer optional, it’s essential.

Check Fraud: A Persistent Challenge

Despite ongoing industry efforts, check fraud remains one of the most difficult threats for financial institutions to detect and mitigate. Many banks and credit unions continue to rely on legacy systems that are resource-intensive and lack the real-time capabilities needed to identify sophisticated fraud tactics. The 2024 FRFS Risk Officer Survey highlights several types of check fraud that are especially challenging: 

• Counterfeit checks were reported by 94% of institutions, with 34% indicating that losses from this type are increasing.
• Payee forgery affected 90% of institutions, with 21% noting rising losses.
• Endorsement forgery was experienced by 84% of respondents.
• Check washing impacted 83% of institutions and was cited by 24% as a growing concern.

In contrast, check kiting, float, and paperhanging fraud types are on the decline, thanks to collaborative mitigation efforts across the industry. However, the continued prevalence of forgery and counterfeit-related fraud underscores the need for more advanced detection tools and real-time data integration. As fraudsters exploit gaps in outdated infrastructure, financial institutions must prioritize modernization, automation, and cross-channel visibility to stay ahead of evolving threats.

Emerging Threats and Risk Factors

Beyond payment fraud, the survey highlights several rising concerns that are reshaping institutional risk profiles. These issues reflect the broader complexity of today’s financial environment and the growing pressure on internal teams to adapt quickly.

• Cybersecurity: 28% of institutions flagged cybersecurity as a growing concern.
• Mule account activity: +12% impact on risk profiles.
• Regulatory uncertainty: 19% cited regulation as a pressure point. 

Institutions also reported that limited IT resources, the complexity of third-party integrations, and the speed at which reputational risks can escalate, especially through social media, are all contributing to a more volatile and demanding risk environment. These factors reinforce the need for scalable, integrated solutions that can adapt to evolving threats and support faster, more informed decision-making.

The Path Forward: Smarter, Integrated Defenses

As fraud tactics evolve, so must the tools used to fight them. The 2024 FRFS Risk Officer Survey makes it clear: siloed systems and reactive strategies are no longer enough. Financial institutions need platforms that centralize data, streamline detection, and support real-time decision-making across all payment channels. 

That’s where solutions like Unify and Alogent Shield come in. These platforms deliver centralized fraud intelligence, seamless integration across deposit channels, and proactive risk management—empowering banks and  credit unions to stay ahead of threats without compromising user experience.

Learn more about how Alogent’s solutions can help your institution modernize its payments infrastructure, enhance fraud prevention, and improve operational performance.

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