Check Fraud + Business Banking: 4 Strategies to Keep Commercial Accounts Safe
Despite federal government plans to phase out paper checks for disbursements, checks remain deeply embedded in the business world. Small businesses still write checks at a rate eight times higher than retail account holders – nearly one per day, according to the Financial Brand. The 2024 AFP Payments Fraud and Control Survey confirms that 63% of businesses experienced attempted or actual check fraud, making it the most targeted payment method. Yet 70% of organizations have no plans to stop using checks, citing their traceable audit trail, cost-effectiveness, and control over cash flow and payment timing. With established back-office processes, checks remain firmly entrenched in business payments, even as digital options expand.
This paradox presents both a challenge and an opportunity for financial institutions: how to protect commercial account holders from check fraud while strengthening long-term relationships.
One answer lies in modernizing deposit operations and fraud detection strategies. Centralizing data, streamlining workflows, and integrating advanced technologies like AI, real-time monitoring, and consortium intelligence enable financial institutions to detect threats early and respond quickly. Every second, three mobile deposits are processed on an Alogent platform across the US, UK, and Canada - and that’s just for mobile deposits. This scale reflects deep expertise and proven performance. To reduce risk and strengthen fraud defenses, focus on these four key areas where Alogent delivers measurable impact.
4 Strategies to Minimize Business Check Fraud
1. Transition to a Holistic Check Processing Approach
Preventing business check fraud starts with understanding where, when, and how it occurs. Legacy systems often lack cross-channel visibility, treating teller, ATM/ITM, mobile, and other RDC deposits as separate workflows. This siloed approach creates inconsistencies in data and processing—gaps that fraudsters are quick to exploit.
A holistic strategy consolidates all deposit channels under a unified framework, applying consistent business rules across every capture point. This ensures each item is evaluated with the same level of scrutiny and provides centralized access to transaction data. The result: stronger fraud defenses, easier anomaly detection, and reduced risk for both institutions and account holders.
How Alogent Helps:
Unify brings all deposit channels together under one platform with a single API, eliminating data silos and enforcing consistent processing rules. Its real-time image and data validations operate 24/7/365, enabling early fraud detection. With transaction-level processing, institutions gain faster, more informed decision-making capabilities, delivering a secure, omni-channel banking experience for commercial account holders, no matter when or where they bank.
Read: Alogent Shield and the Future of Check Fraud Mitigation
2. Day Zero Detection: Stop Fraud at the Point of Presentment
In fraud detection, timing is everything. “Day Zero” refers to analyzing deposits as close to real-time as possible — before Day 1 processing or settlement. Delayed analysis creates vulnerabilities that fraudsters can exploit, increasing risk for financial institutions.
Think of Day Zero as an instant defense in a fast-moving environment. The earlier a deposit is evaluated, the faster your institution can identify suspicious activity, reduce losses, and post funds - building trust and confidence with commercial account holders.
How Alogent Helps:
Alogent Shield provides multiple layers of fraud mitigation capabilities across all deposit channels. It ensures that each item is checked against comprehensive user scoring models using historical banking activity, unique deposit patterns, business rules, OFAC lists, and other criteria. Alogent Shield identifies suspicious items immediately, allowing financial institutions to act at the point of capture rather than after the item reaches the back office. This reduces exposure, strengthens defenses, and enhances trust with all account holders.
3. Harness AI and Machine Learning
Fraudsters are constantly evolving, using increasingly sophisticated methods to bypass traditional fraud controls. To stay ahead, financial institutions need intelligent tools that can analyze transactions at scale, detect anomalies, adapt to new fraud schemes, and continuously improve accuracy. Artificial Intelligence (AI) and Machine Learning (ML) empower banks and credit unions to identify suspicious activity and patterns in real-time across multiple deposit channels.
These technologies detect unusual patterns and anomalies that conventional systems often miss, especially critical for business account holders who process high-value checks and frequent transactions. By shifting from reactive investigation to proactive prevention, institutions can intercept fraud at the point of capture, minimizing disruption and ensuring a safer, more seamless experience for commercial clients.
How Alogent Helps:
Alogent Shield+* takes fraud detection to the next level by combining AI, machine learning, and computer vision to evaluate 24 critical check attributes in real-time, including image quality (IQA), image usability (IUA), MICR data, and signature anomalies. These advanced insights add a deeper level of protection against check fraud, including but not limited to kitting, alterations, counterfeits, and paperhanging attempts.
Get your copy of the Alogent Shield datasheet
4. Leverage Industry-Wide Consortium Data
Check fraud isn’t confined to a single institution – what enters one bank as in-clearing may exit another as out-clearing. Relying solely on internal data can leave your institution blind to broader fraud schemes affecting the industry.
By tapping into a consortium of check images and known fraudulent data from thousands of institutions, banks, and credit unions, you gain broader visibility into emerging threats. This shared intelligence empowers them to flag suspicious items that might otherwise go unnoticed.
How Alogent Helps:
Alogent Shield+ gives banks and credit unions access to a cloud-hosted consortium of fraud data, offering real-time insights drawn from the collective experience of the industry. This broader visibility strengthens fraud detection and prevention strategies across the board.
The Bottom Line: Checks and Check Fraud Aren’t Going Away
With 70% of businesses continuing to rely on checks, fraud remains a significant risk. Financial institutions can proactively combat this risk by unifying deposit channels, enabling real-time processing and prevention, and leveraging advanced technologies like AI, machine learning, and consortium data. These measures not only reduce fraud losses but also accelerate processing times and strengthen trust and engagement with commercial account holders.
Explore the full range of Alogent’s fraud mitigation capabilities in this eBook, featuring in-depth insights into Alogent Shield and Alogent Shield+.
Ready for a closer look? Schedule a live demo or request pricing for your bank or credit union today.
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* Alogent Shield+ is powered by Mitek’s Check Fraud Defender.