The art of combating check fraud without compromising customer experience
Checks may be written less
frequently, but their value is rising. According to the Federal Reserve’s 2022 Payments Study, checks
dropped from 14 billion in 2018 to 11.2 billion in 2021, while the average
value per check jumped 27%. This growth has also drawn
increasingly sophisticated fraud attempts, with the U.S. Treasury
Department reporting
that check fraud has increased 385% since the pandemic.
Staying ahead of fraudsters who quickly outsmart defense systems is critical for protecting customers. At the same time, regulators are ramping up pressure on financial institutions to strengthen fraud controls, imposing increasingly strict compliance requirements. Check fraud, in particular, is gaining attention: in June 2025, the Federal Reserve, the OCC, and the FDIC issued a joint request for information seeking public input on potential actions to help consumers, businesses and financial institutions mitigate the risk of payments fraud, with a particular focus on check fraud.
Yet financial institutions must protect against fraud without disrupting customer experience. Imagine a check flagged simply because a customer’s signature looks slightly different, but they were just in a hurry. These types of false alarms will frustrate customers. While they expect strong security, they also demand speed and convenience in their banking experiences, whether online, via mobile apps, or at the branch. If those expectations aren’t met, they won’t hesitate to take their business elsewhere.
So, fraud protection presents a delicate balance: too strict, and false positives tie up bankers and frustrate customers; too loose, and fraud runs rampant, resulting in financial loss, regulatory scrutiny and diminished customer trust. Financial institutions must find the sweet spot, catching sophisticated fraud quickly while keeping legitimate transactions seamless.