2024 in Review: Innovations in Fraud Prevention and Compliance at Unit21

As we wrap up another successful year at Unit21, we reflect on our achievements, innovations, and strides in enhancing fraud detection and compliance efficiencies. This blog post highlights the key developments that have shaped our journey throughout 2024.

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🛡️ Check Fraud

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Check Fraud Rules

Check Fraud Rules are specifically designed to combat the rising threat of check fraud, with a focus on the most common types of check fraud, such as check washing, serial number out of range, and other fraudulent activities.

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With our out-of-the-box, templated check fraud rules, you can increase your speed in responding to potential fraud incidents. These rules operate as frequently as every 10 minutes, leveraging all your data—whether it’s LexisNexis data, device information, or check images—to help you promptly detect fraud.

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What’s more, alerts related to check fraud will appear in a centralized location, allowing investigators to view all relevant alerts across various fraud types and payment methods—without switching between different modules. This approach enhances efficiency and helps your team focus on what matters most.

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Our Check Fraud Rules are transparent, explainable, and easily modifiable to suit your operational needs.

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AI Agent for Check Fraud Investigations

AI Agent for Check Fraud Investigations revolutionizes the way fraud investigations are conducted, using AI to automate over 20 different verifications that are otherwise done manually by human analysts today.

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The AI Agent acts as a virtual investigation assistant, performing essential checks on check images, signature documents, and associated data. Consolidating findings to help fraud operators make informed decisions significantly speeds up the check fraud investigation process, allowing institutions to respond to potential fraud in minutes rather than hours or days.

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Additionally, the AI agent provides human-readable summaries of verification results, ensuring transparency and trust in the investigation process.

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By integrating the AI Agent into your operations, you’re not just enhancing efficiency; you’re also empowering your team to focus on more strategic tasks while reducing the risks associated with fraudulent transactions.

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Dark Web Monitoring

Dark Web Monitoring for stolen checks is a powerful tool designed to protect institutions from the escalating threats of check fraud and ACH fraud, providing unparalleled peace of mind.

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Unit21’s Dark Web Monitoring automatically alerts organizations about stolen checks being sold online, including on the dark web. This proactive approach ensures that institutions receive daily updates without the need for complex setups, allowing them to act swiftly and safeguard their customers. By automatically checking checks being sold on the dark web, this feature offers valuable insights into fraud being perpetrated against your organization.

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Each alert provides critical information, including check amounts, posting dates, and images of the stolen checks. This level of detail empowers organizations to respond quickly and effectively to potential threats. Furthermore, the ability to route alerts to specific queues streamlines the investigation process, enhancing operational efficiency and ensuring that no alert goes unnoticed.

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🤝 Consortium

Unit21’s Fraud Consortium went live in February 2024, and since then, we have more than doubled our membership, ending the year with over 70 members and over 50 million user records. Further, our Consortium is now the only active platform with members in both Fintech and Banking as a result of our members’ trust in our patented data privacy preservation technology. We also established our inaugural Advisory Board for the Consortium, allowing us to continue to realize our vision - to build a unified fraud network for the entire industry.

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💼 ACH Fraud

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Out-of-the-Box ACH Fraud Rules

Out-of-the-box ACH Fraud Rules provide a robust framework for detecting and preventing unauthorized transactions, a critical need in today's digital financial landscape. These rules empower organizations to effectively identify suspicious activities, enabling the creation of alerts for potentially fraudulent ACH transactions. This proactive approach safeguards financial assets and enhances overall transaction security.
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With the introduction of rules that address scenarios such as Multiple Failed Verification Attempts, Mismatched Sender and Receiver Names, and Suspicious Duplicate ACH Transactions, organizations can better differentiate between genuine errors and fraudulent activities while addressing the most common forms of ACH fraud with out-of-the-box templates that can be set up within a few clicks.

By implementing these comprehensive ACH Fraud Rules, financial institutions will significantly improve their ability to detect unauthorized transactions, leading to more informed decision-making and a stronger defense against evolving fraud threats.

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ACH Risk Score

ACH Risk Score is a machine learning model built by Unit21, designed to predict R10 (unauthorized transaction) returns before they come in. This score evaluates transactions as they come in, allowing organizations to make informed decisions swiftly based on various factors, including transaction history and user behavior. The ACH Risk Score is dynamic; it adapts as more data is collected, enabling organizations to continuously refine their fraud detection models and identify emerging fraud patterns and trends. It is also transparent, clearly displaying the top reasons for the score.

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Additionally, organizations can set specific thresholds for risk scores, ensuring that transactions exceeding these levels are flagged for further investigation while good transactions are allowed to go through. This proactive approach helps mitigate potential fraud before it impacts customers without impacting the experience for good customers.

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AI Agent for ACH Investigations

AI Agent for ACH Investigations streamlines the alert review process for investigators by leveraging artificial intelligence to enhance efficiency and accuracy. The AI Agent features two core functionalities: it will analyze metadata from alerts to determine potential illegal activity and conduct simple address verifications.

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We have created an AI-driven solution that not only speeds up investigations but also evolves to handle a wider range of alerts autonomously. By combining the strengths of our AI Agent with insights gathered from customer feedback, we are committed to developing a robust tool that meets the dynamic needs of ACH fraud investigations.

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📜 AML

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Customer Risk Ratings

Customer Risk Ratings (CRR) in Rules represent a significant enhancement to Unit21’s risk management capabilities, set to be delivered in two phases. Today, you can use our Risk Ratings product to set a score that determines risk for a customer profile using parameters such as their address or previous alerts raised from rules. With this release, you can use the numerical CRR score ranging from 0 to 100 when creating your rules as a condition filter. This feature empowers financial institutions to efficiently meet their obligations for risk-rating customers and conducting Enhanced Due Diligence (EDD).

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By integrating CRR into the rule-building processes within the Dynamic Rule Builder and scenario rules, organizations can create tailored and effective risk management strategies. Once deployed, custom risk models allow for periodic reviews of medium and high-risk accounts, saving hours previously spent on manual risk score maintenance while providing transparent audibility for risk scoring. With CRR, Unit21 customers can better assess risk levels and proactively respond to potential threats, streamlining their compliance efforts significantly.

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Watchlists

Watchlists is a comprehensive solution designed to streamline compliance processes for ongoing screening for Sanctions, Politically Exposed Persons (PEPs), and adverse media. This centralized workflow consolidates compliance activities, enabling efficient alert management and faster decision-making. With advanced matching technology powered by LexisNexis data, our system significantly reduces false positives, allowing organizations to focus on genuine risks rather than erroneous alerts.

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Unit21’s Watchlists offering integrates seamlessly with Unit21’s transaction monitoring and case management, providing a holistic compliance solution that simplifies operations. Users can define automated screening rules that are continuously applied, eliminating the need for ongoing updates. Additionally, our configurable workflows allow for tailored alert generation, aligning with specific risk tolerances and enhancing tracking efficiency, while the AI Agent can help to automatically work false positives with a human in the loop.

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314(a)

314(a) has been enhanced with new features designed to simplify the process. These improvements include intuitive tools for running scans and advanced configuration options to tailor matching criteria to your risk tolerance. With fuzzy matching on names and the flexibility to configure specific 314(a)-provided fields for matching, you can fine-tune the process to meet your needs. Additionally, the ability to define distinct matching criteria for persons versus businesses gives you greater precision and control. Our streamlined and user-friendly alert interface further supports efficient and effective investigation of potential matches.

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Quality Assurance & Quality Control

QA/QC allows compliance and fraud teams to generate random samples of previously worked alerts while integrating seamlessly with Unit21’s queue and workflow management tooling. You can generate samples based on any criteria that you can think of, filtering based on any data that is available to you within Unit21.

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With our QA/QC feature, teams can streamline their operations by ensuring that samples are truly random and representative, using criteria to sample based on your own data, and setting up your QA/QC workflows based on your own processes. This not only reduces operational costs but also provides valuable metrics to assess individual analyst performance and overall process effectiveness. By enabling configurable workflows and tailored sample generation, Unit21 empowers compliance managers to improve their quality control practices, ultimately fostering a more robust and responsive risk management framework.

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🤖 AI

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AI Agent

Unit 21’s AI Agent revolutionizes risk review processes by fully automating investigation checklists, allowing agents to focus on critical fact-finding with all necessary data readily available. This AI-driven solution not only enhances efficiency by significantly reducing the time agents spend on alerts but also ensures human-level quality through review and editing capabilities. Further, your AI Agent is customizable to meet your organizational standards. Several early customers are live with the AI Agent, achieving as high as 10x reduction in their Alert Handle Time through the automation of the entire investigation checklist.

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Now with the ability to query integrated data in Unit21 for deeper customer insights and real-time analysis of transactional and behavioral patterns, the AI Agent offers a comprehensive snapshot view when needed. Additionally, its Internet-enabled functionality streamlines basic due diligence, providing automated source verification with just a click. Overall, Unit21’s AI Agent empowers organizations to enhance compliance workflows, improve accuracy, and optimize resource allocation, leading to more effective risk management.

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Ask Your Data

Ask Your Data empowers users to leverage natural language queries to extract critical insights from their data seamlessly. This innovative tool enhances the efficiency of AML and fraud programs by allowing analysts to ask complex questions and receive instant, actionable responses, eliminating the tedious process of manual data manipulation.

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With the ability to summarize investigations, analyze transaction patterns, and visualize trends, users can gain a holistic understanding of their operations, ultimately leading to more informed decision-making. By keeping users in control throughout the data lifecycle, Ask Your Data not only streamlines workflows but also enhances compliance, enabling organizations to respond swiftly to emerging risks and maintain robust fraud prevention measures.

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Interested in gaining early access to our latest AI innovations? Become an AI Agent Design Partner. Join the waitlist, and we’ll be in touch.

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🌐 IP Data Enrichment

IP Data Enrichment is a powerful enhancement that identifies IP addresses associated with bots, Tor, proxies, or VPNs and incorporates these insights into our rules engine. This capability strengthens defenses against several high-risk fraud types faced by financial institutions and fintechs. For example, it helps prevent account takeover (ATO) by detecting repeated login attempts or credential stuffing from masked IP addresses, blocking unauthorized access early. It mitigates synthetic identity fraud by flagging attempts to use anonymized connections, which often signal fake account creation.

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Payment fraud, such as carding or unauthorized transactions, is curtailed by identifying high-risk, anonymized IPs commonly used in testing stolen credentials. Fraudulent loan or credit applications can be detected by spotting IPs from Tor or proxies that indicate efforts to bypass geolocation-based risk assessments. It also aids in disrupting money mule operations and transaction laundering by identifying unusual patterns of activity or anonymized connections used to obscure fund origins. This data is available for you to use in Rules as part of your fraud detection program, empowering you to combat these threats proactively.

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🔒 Better Security

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Enhanced File-Level Encryption

Enhanced File-Level Encryption: We're excited to announce an enhancement to our encryption capabilities with the introduction of file-level encryption for customers using FFIP, complementing our existing disk-level encryption. This update integrates advanced PGP (Pretty Good Privacy) encryption protocols and AWS Key Management Service (KMS) to provide an additional layer of security for sensitive data. PGP employs a hybrid cryptosystem, combining symmetric-key and public-key encryption, to ensure your data remains confidential and protected from unauthorized access during storage or transit. AWS KMS, a managed service, enables seamless creation and control of cryptographic keys, incorporating best practices like regular key rotation and secure storage to reduce the risk of key compromise. Together, these enhancements reinforce our commitment to delivering industry-leading data protection and security.

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📅 Looking Ahead

As we move into 2025, we are excited about the new initiatives and enhancements coming your way. We will continue to innovate and improve our offerings, ensuring that you have the tools necessary to combat fraud and maintain compliance effectively. Thank you for being a part of the Unit21 community, and we look forward to another year of innovation and success!

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