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July 4, 2024 - Greg Oprendek

5 Ways to Grow Your Credit Union Without Increasing Fraud

From 2023 to 2024, the credit union system’s net worth increased by $13.3 billion according to National Credit Union Administration data. Trends have shown credit unions increasingly becoming buyers in bank deals, reaching a record high of nearly 28% in 2024.

The pattern is clear, credit unions are growing—and fast. Credit unions offer a unique experience compared to traditional banks and that experience is winning them customers. However, all financial institutions (FIs), no matter the size, structure, or customer base, will inevitably face fraud attacks. Balancing growth with security can be daunting, especially when facing sophisticated modern fraudsters with advanced machine learning and AI tools at their fingertips.

Maintaining strong growth without inviting more fraud attacks is possible for any credit union to accomplish. In the end, it comes down to having the right tools and following the right strategies. Here are five ways to grow your credit union without inviting more fraud that you can act upon as soon as you finish this article.

1. Reduce fraud with an end-to-end approach

Traditional, non-holistic fraud detection methods often rely on static rules and historical data. These can not only fall behind evolving fraud tactics but also miss critical fraud signals at various points along the customer journey. End-to-end fraud platforms, specifically those powered by machine learning and AI, enable credit unions to proactively identify and mitigate fraudulent activities before they cause significant damage.

They do this by analyzing a wide range of data points across the entire customer journey to provide a comprehensive view of member behavior. Holistic platforms like DataVisor detect fraud patterns in real-time by leveraging unsupervised machine learning that adapts to fraud patterns without the need for historical data. This means even new and unknown fraud tactics can be identified and thwarted early.

2. Enhance user experience with a safer, trusted onboarding process

Customers choose safety above all other factors when choosing a place to store their money. Surveys have confirmed this remains true as fraud threats rise and more consumers are aware of, and fall victim to, costly scams. A secure platform not only protects your credit union but also enhances the user experience. AI and ML-powered platforms can streamline the onboarding process by quickly verifying identities and detecting any fraudulent attempts, providing new members with a smooth and secure start.

AI-driven insights can also help credit unions tailor their services to individual members, offering personalized recommendations and solutions. This not only improves satisfaction but also fosters loyalty and long-term engagement.

3. Cut down on overhead by leveraging Generative AI

Legacy, rules-based systems still work in detecting and preventing many types of fraud. But, they rely heavily on overhead costs and manual work. Tuning rules, reviewing flagged transactions, and decisioning on potential fraud all require the attention of fraud teams. Using Generative AI tools, like AI Co-Pilot, can automate rule tuning, auto-generate feature scripts, handle debugging, and even automatically decision fraud alerts without needing manual review.

In NASA FCU’s case, using a generative-AI-powered approach to reducing overhead helped them achieve an 85% reduction in manual review time, saving them a considerable amount in total costs.

4. Centralize fraud operations for more accurate, faster detection and prevention

Decentralized fraud management structures, while still viable ways to manage fraud, have significant pitfalls when facing modern fraud attacks. They lead to fragmentation and inefficiencies that can increase overhead and allow fraud to slip through thanks to siloed data not reaching the right places.

Streamlining fraud prevention into a single, centralized location makes detection and prevention faster as all teams are accessing data from every source in one place.

5. Scale by adding customers without onboarding fraudsters

As your credit union grows, so does the volume of transactions and member activities. Modern solutions are designed to scale seamlessly, ensuring that your fraud detection capabilities grow alongside your institution.

Continuous real-time transaction monitoring ensures that legitimate activities proceed without interruption, while suspicious activities are flagged and reviewed. This balance reduces false positives and enhances member trust.

Choosing the right tools to grow without inviting fraud

Growing your credit union doesn’t have to come at the cost of increased fraud risk. By integrating advanced machine learning and leading AI tools like DataVisor, you can create a secure, seamless, and personalized experience for your members.

This approach not only mitigates fraud but also fuels sustainable growth by winning customers with a best-in-class experience. Embrace the future of fraud prevention and member experience, and watch your credit union thrive. See how DataVisor can take your fraud prevention to industry-leading heights while supporting your growth by scheduling a personalized demo with our team.

about Greg Oprendek
Greg is a passionate digital marketer, avid basketball fan, aspiring fraud expert, and Content Marketing Manager at DataVisor.
about Greg Oprendek
Greg is a passionate digital marketer, avid basketball fan, aspiring fraud expert, and Content Marketing Manager at DataVisor.