How credit unions can work to identify and eliminate fraud risks

Credit unions (CUs) have been known historically for their member-first mentality and intimate face-to-face banking model. This business structure has worked in their favor, but it also has left some CUs less prepared for the pandemic-driven shift to digital-first banking and its associated risks — particularly the risk of online fraud.

Recent data revealed credit unions’ specific vulnerabilities in this area, which include leaked employee credentials, insecure email networks and subpar software patch management. These weaknesses translate to an estimated yearly financial risk of direct fraud attacks that can range from $190,000 for small CUs to $1.2 million for large CUs.

Indirect risks to CUs via their third-party vendors may be even more damaging. Technology solutions to these issues exist in the market, making it essential that credit unions implement cybersecurity innovations to avoid potentially devastating effects on both revenues and members’ trust. This month, PYMNTS examines the intensifying fraud risks confronting credit unions and the innovative technologies helping CUs mitigate these risks.


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