The United States Treasury’s Financial Crimes Enforcement Network (FinCEN) has released the full data for Suspicious Activity Reporting (SAR) that financial institutions filed during 2024. You can also look back at 2023 data by checking out my blog from last year. Here’s what stands out for 2024:
Total SARs by payment type filed for 2024:
Compared to 2023, this is how SAR volume for each payment type has changed:
So, what happened between the years 2023 and 2024? While ACH, Checks, and Card SAR filings are still historically high, we are seeing a plateauing effect. ACH has been continuing to see consistent growth over the past few years. This has led to new, risk-based processes and procedures from Nacha. Check and card fraud has also been consistently ramping up since the pandemic ended. Thus, though each of those three remains historically high and fraud remains a concern, it’s not surprising. What we are seeing is “more of the same” versus higher growth patterns.
The same cannot be said about wire transfers, however, as they are experiencing the “increasing at an increasing rate” upward arc angle with three straight years of 32%, 26%, and 24% growth rates in SARs filed.
At 121,359, that may seem like a low filing number but consider that there are fewer wires sent when compared to transactions sent via other payment networks. What’s happening? It could tie to themes outlined in the FBI’s IC3 annual reporting related to investment fraud which has ranged between $1.5 and $4.6 billion in losses between 2021 and 2023 (still awaiting the FBI’s 2024 reporting). Adding up Fedwire and CHIPs data and then dividing by total SARs, financial institutions went from filing one SAR for every 8,636 wires during 2015 to filing one SAR for every 2,899 wires! Massive drop, which means that financial institutions are enduring four times as much fraud as they did just 10 years ago!
Let’s take a look at 2019’s total SAR filings five years ago:
Notice a pattern here? It’s the exact same order for 2019 versus 2024 in terms of SAR filing volume. Checks and cards have been a source of pain for financial institutions, as both involve something physical that is displayed for payment such as a paper check handled, or a plastic card inserted or swiped. Honestly, what you see is nothing new but it’s the significant growth in volumes seen in the past five years that is alarming:
% change in SARs filed between 2019 and 2024:
Fraud is high everywhere, as technologies are evolving and so are scams/schemes for fraudsters to use. Financial institutions need to be on high alert and implement risk-based processes and procedures to not only protect themselves from loss, but their account holders who are targets for fraud. If you’re looking for some assistance and mitigation solutions regarding fraud, check out our new Fraud Bundle chock full of webinar and on-demand training.
Republished with permission from EPCOR.