ABA Fraudcast: Developing a hybrid approach to fighting check fraud
A mid-size bank hunts for the sweet spot with training, software and plenty of patience.
March 20, 2025
What does fighting check fraud cost banks? How do banks find success in that struggle? In the latest episode of the ABA Fraudcast, ABA’s Paul Benda continues to explore the challenges of a metastasizing problem for banks, with his guest Sam Drennen, EVP and COO of First American Bank and Trust in Georgia. Drennen discusses ways his bank has learned hard lessons defending against criminals focused on a payment mode that has resisted extermination.
The ABA Fraudcast will be published every three weeks, on this site, in ABA Daily Newsbytes and wherever you listen to and subscribe to your favorite podcasts.
If you can’t see the audio player above, click here to listen to this week’s episode.
Check out important ABA resources on this topic for banks at aba.com/checkfraud. The recently remodeled ABA Communities provide opportunities to share insights and resources with fellow bankers.
ABA Banking Journal: Enhancements, cost reductions announced for Social Security verification system
March 19, 2025
The Social Security Administration today announced a plan to reduce costs and enhance its Electronic Consent Based Social Security Number Verification, or eCBSV, which allows financial institutions and other permitted entities to verify if an individual’s Social Security number, name and date of birth combination matches Social Security records.
In a statement, SSA said it has sought input on improving the eCBSV system, including from the financial industry and the Big Tent Coalition, which the American Bankers Association founded and co-chairs. The agency has committed to implementing several recommendations to enhance the service’s effectiveness in combating synthetic identity fraud.
Among other things, the plan calls for a “phased approach” to reduce operating costs by as much as 40% by focusing on critical functions necessary for maintaining the eCBSV system. Annual fees charged to participating entities will be reduced by approximately 25%. SSA said it will also work to enhance the no-match results provided by the system, explore the integration of consent-based SSN verification with eCBSV, and continue to hold regular meetings with stakeholders.
“We are committed to enhancing the eCBSV service to better serve our stakeholders and effectively combat identity fraud,” said Lee Dudek, Acting Commissioner of Social Security. “By reducing costs and improving our processes, we aim to provide a more accessible and efficient tool for financial institutions and other entities.”
ABA Banking Journal: ABA Statement on Nomination of Michelle Bowman as Vice Chair for Supervision
March 17, 2025 | Rob Nichols, President and CEO
“We applaud President Trump’s nomination of Governor Michelle Bowman to serve as the Federal Reserve’s next vice chair for supervision, and we urge the Senate to quickly confirm her so she can take on the additional responsibilities that come with this important role. Since joining the Fed, Governor Bowman has been a thoughtful, principled voice for sensible regulatory and monetary policy and someone who understands the important role that banks of all sizes play in our financial system and our economy. Her prior experience as a community banker and state regulator brings a much-needed real-world perspective to a wide range of policy issues facing our industry, including the need to ensure that all market participants have a level playing field.
“We look forward to working with Governor Bowman to ensure that the nation’s banking regulatory framework is rational, forward-looking and appropriately tailored, so that all banks can continue to compete and succeed as they serve their customers and communities.”
CISA News: Everything you say to your Echo will be sent to Amazon starting on March 28
Since Amazon announced plans for a generative AI version of Alexa, we were concerned about user privacy. With Alexa+ rolling out to Amazon Echo devices in the coming weeks, we’re getting a clearer view of the privacy concessions people will have to make to maximize usage of the AI voice assistant and avoid bricking functionality of already-purchased devices.
In an email sent to customers today, Amazon said that Echo users will no longer be able to set their devices to process Alexa requests locally and, therefore, avoid sending voice recordings to Amazon’s cloud. Amazon apparently sent the email to users with “Do Not Send Voice Recordings," which is supported by the Echo (4th Gen), Echo Show 15, and Echo Show 10, enabled. Starting on March 28, recordings of every command spoken to the Alexa living in Echo speakers and smart displays will automatically be sent to Amazon and processed in the cloud.
Attempting to rationalize the change, Amazon’s email said:
"As we continue to expand Alexa’s capabilities with generative AI features that rely on the processing power of Amazon’s secure cloud, we have decided to no longer support this feature."
One of the most marketed features of Alexa+ is its more advanced ability to recognize who is speaking to it, a feature known as Alexa Voice ID. To accommodate this feature, Amazon is eliminating a privacy-focused capability for all Echo users, even those who aren’t interested in the subscription-based version of Alexa or want to use Alexa+ but not its ability to recognize different voices.
However, there are plenty of reasons people wouldn't want Amazon to receive recordings of what they say to their personal device. For one, the idea of a conglomerate being able to listen to personal requests made in your home is, simply, unnerving.
Further, Amazon has previously mismanaged Alexa voice recordings. In 2023, Amazon agreed to pay $25 million in civil penalties over the revelation that it stored recordings of children’s interactions with Alexa forever. Adults also didn’t feel properly informed of Amazon’s inclination to keep Alexa recordings unless prompted not to until 2019—five years after the first Echo came out.
If that's not enough to deter you from sharing voice recordings with Amazon, note that the company allowed employees to listen to Alexa voice recordings. In 2019, Bloomberg reported that Amazon employees listened to as many as 1,000 audio samples during their nine-hour shifts. Amazon says it allows employees to listen to Alexa voice recordings to train its speech recognition and natural language understanding systems.
Other reasons people may be hesitant to trust Amazon with personal voice samples include the previous usage of Alexa voice recordings in criminal trials and Amazon paying a settlement in 2023 in relation to allegations that it allowed "thousands of employees and contractors to watch video recordings of customers' private spaces" taken from Ring cameras, per the Federal Trade Commission.
Save recordings or lose functionality
Likely looking to get ahead of these concerns, Amazon said in its email today that by default, it will delete recordings of users’ Alexa requests after processing. However, anyone with their Echo device set to “Don’t save recordings” will see their already-purchased devices’ Voice ID feature bricked. Voice ID enables Alexa to do things like share user-specified calendar events, reminders, music, and more. Previously, Amazon has said that "if you choose not to save any voice recordings, Voice ID may not work." As of March 28, broken Voice ID is a guarantee for people who don't let Amazon store their voice recordings.
Amazon's email says:
"Alexa voice requests are always encrypted in transit to Amazon’s secure cloud, which was designed with layers of security protections to keep customer information safe. Customers can continue to choose from a robust set of controls by visiting the Alexa Privacy dashboard online or navigating to More > Alexa Privacy in the Alexa app."
Amazon is forcing Echo users to make a couple of tough decisions: Grant Amazon access to recordings of everything you say to Alexa or stop using an Echo; let Amazon save voice recordings and have employees listen to them or lose a feature set to become more advanced and central to the next generation of Alexa.
However, Amazon is betting big that Alexa+ can dig the voice assistant out of a financial pit. Amazon has publicly committed to keeping the free version of Alexa around, but Alexa+ is viewed as Amazon's last hope for keeping Alexa alive and making it profitable. Anything Amazon can do to get people to pay for Alexa takes precedence over other Alexa user demands, including, it seems, privacy.
The Access to Credit for our Rural Economy Act, also known as ACRE, will help sustain and grow rural America by making it easier for farmers, ranchers, and rural homeowners to access low-cost credit. ACRE will lower the cost of making a loan backed by agricultural real estate, enhance competition between lenders for agricultural and rural housing loans, and help expand access to low-cost credit in rural America.
Breaking Into Banking 201: Analyzing Repayment Sources Webinar
March 26, 2025
This 9-module online course is a “sequel” to the 101 course and is best taken after completion of that course, though it is not a prerequisite. The 201 course includes a case study and dives deeper into topics covered in modules 4, 6, and 8 of the 101 course: analyzing a borrower’s balance sheet, income statement, collateral, and risk ratings.
Managing risk is the #1 priority for all financial institutions, starting at the new account desk. If a criminal cannot open a bank account, they cannot negotiate a stolen check, embezzle from their employer, or steal from your organization and community. Well-trained new account personnel and universal bankers who recognize and stop attempted fraudulent activity are the first lines of defense in protecting a financial institution from fraudsters. Unfortunately, new account personnel are often trained "on the job," which results in an environment of potential vulnerability and unnecessary losses.
Trust and business accounts continue to grow in popularity and complexity - LLCs owned by Revocable Trusts and businesses owned by other businesses… the need for ongoing compliance training is paramount to maintain diligence and update processes and procedures.
This full-day program is one of the country's most comprehensive seminars on opening deposit accounts. The session answers many of the complicated questions customers and employees ask. The 200+ page detailed manual, included in the registration and customized to your state law, has become an invaluable resource for banks across the state. These workshops are highly interactive. Come prepared to get your questions answered!
Participating in learning opportunities outside the bank can be challenging. Take advantage of the SDBA's extensive selection of webinars and on-demand training to enhance your banking expertise directly from your computer.
In this episode of Banking Matters, host, Linsey Hugueley, speaks with Brien O’Connor about the intricacies of Directors and Officers (D&O) insurance, emphasizing its importance for banks. He explains the purpose of D&O insurance, the differences between various policies, and the coverage provided to employees and the bank itself. The conversation also touches on common misconceptions, trends in claims, and the significance of understanding policy limits and exclusions. Brien concludes with advice for banks on managing their insurance needs effectively.
Participating in learning opportunities outside the bank can be challenging. Take advantage of the SDBA's extensive selection of webinars and on-demand training to enhance your banking expertise directly from your computer.
