Independent Banker - June 2020 - 26

PORTFOLIO
EXPERTS
Game-changing industry
insights for community bankers
Keeping up with change
means having the right
core vendor
In these chaotic times, you may not
be thinking about switching core
vendors, but is your core provider
really giving you everything you need?
As we advance through the changes
that are taking place in the banking
environment, having the right vendors
in place can either push you ahead or
leave you in the dust.
Once you're able to pause and
decide it's time to evaluate new
vendors, there will be multiple areas
to consider such as cost, timeline
and onboarding. But it doesn't stop
there-to narrow down your selection,
there is critical communication that
needs to happen prior to signing on
the dotted line.
For example, you should:
* Ensure you ask for client
references.
* Meet the right team conducting
the implementation.
* Review the vendor's contract
terms.
Leave no stone unturned when
conducting the vendor management
process. Follow the IBT Apps blog at
blog.ibtapps.com to learn more about
the " 7 Components of Successful Core
Vendor Management " and continue to
receive helpful, ongoing information
on relevant industry topics.
but using this to prioritize your view, "
says Bryan Richardson, a senior knowledge
expert at McKinsey and Company.
" There's a perception that [banks] have
to build these really big, fancy AI [artificial
intelligence] systems with tons of
data to affect the problem, and that's
not the case. They can start small, build
incrementally and still do a lot to mitigate
potential crime. "
Leverage new technology. New
solutions support the fight against
first-party fraud. For example, electronic
consent-based Social Security
number verification, or eCBSV, allows
banks to check applicants' Social Security
information against a national
database (see sidebar). Advancements
in card technology-such as 3D Secure
2.0, which establishes a stronger
authentication approach; and secure
remote commerce, a standardized
e-commerce method-help banks to
streamline their risks. Cross-channel
solutions help banks monitor activity
across the organization.
" We've been implementing an enterprise-wide
fraud solution where we
can take all occurrences of fraud and
bring them together in one place, " says
Frank Bentz, senior vice president and
chief information security officer at
$11.4 billion-asset Sandy Spring Bank
in Olney, Md. " It also uses components
of artificial intelligence and machine
learning to identify patterns in the
data. We're trying to bring in things
2
like first-party fraud and see if it ties to
fraud in other channels. "
Share information. First-party
fraud often moves from bank to
bank, so a sound defensive strategy
relies on sharing information. New
risk management systems and data
aggregators allow banks to request
and share this type of information
with one another digitally, and organizations
like the Financial Services
Information Sharing and Analysis
Center (FS-ISAC) provide forums for
discussion. Simply talking about miti3
gation
strategies goes a long way.
" When it comes to security, we're
generally very open with one another
about 'What systems are you using?
Are you seeing these kinds of fraud
attempts? And how are you mitigating
it?' " says John Sadowski, executive
vice president and chief information
officer at Sandy Spring Bank. " When it
comes to the safety of clients in general,
we don't hold that stuff close to
the vest, because we want to try and
protect folks around the industry. "
For community banks to address
the complexity of first-party fraud,
they will need to try a combination of
approaches. " There is no silver bullet, "
Richardson says. " The goal of this is to
mitigate losses before they happen by
making it harder for synthetic identities
to be onboarded at an institution. "
Colleen Morrison is a writer in Maryland.
Fighting back with eCBSV
The Social Security Administration has announced the rollout of eCBSV,
a fee-based Social Security number verification service. It allows banks
to verify if an individual's number, name and date of birth match Social
Security records.
Joe Hensley
Vice President, IBT Apps
jhensley@ibtapps.com | 512-616-1115
This month, the Social Security Administration begins piloting the
program. By year-end, it will open the program to all initial applicants.
Additional banks may apply during an upcoming open enrollment. Visit
ssa.gov/dataexchange/eCBSV for more information.
http://blog.ibtapps.com http://www.ssa.gov/dataexchange/eCBSV
Independent Banker - June 2020

Table of Contents for the Digital Edition of Independent Banker - June 2020
