JMFA FraudMANAGER® Payment Risk Analysis and Security Tools.

Managing risks is a critical responsibility for financial institutions which have examiners demanding evidence of documented policies, assessments and procedures. Financial institutions have historically placed most of the focus for risks management on loans, investments and EDP operations (disaster recovery) due to the ability to quantify risks related to the balance sheet or daily operations. The risks mentioned and included in most policies are: credit, investment, reputation, liquidity, market, operational, and income risks.

Fraudulent transaction risks are growing and payment risk analysis is becoming a major challenge for institutions. Traditional signature verifications are ineffective or impossible on the vast majority of incoming payments. Newer payment methods tend to use ACH debits, bankcard debits or check conversions that have little or no security besides the assumption of a valid authorization. Better methods are needed that will analyze incoming transactions to identify potential fraud attempts without the reliance on the physical review of an item or image.

JMFA FraudMANAGER® uses institution controlled parameters that are set to the levels deemed by management to represent an acceptable risk associated with the dollar amount, account ownership, type of account, length of time account has been open and type of transaction.

By combining both MICR based and ACH transactions into a single database, the greatest source for fraud threats and check conversions are available for an extensive battery of tests to identify the most suspicious transactions on the day of presentment. As time goes by, historical activity will provide a better source for payment pattern differences and check number exceptions.

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