Just a few weeks into 2025, banks’ fraud-fighting priorities are already clear: check fraud is at the top. American Banker's recent survey of 212 leaders and staff at banks and fintechs found that that nearly half (46%) of respondents consider check fraud a top fraud concern that will negatively impact their organizations in 2025. Their concern is undoubtedly fueled by the fact that Suspicious Activity Reports (SARs) related to check fraud almost doubled between 2021 to 2023.
Mitek’s Check Fraud Defender is an AI-powered solution used today by leading banks to find fraudulent checks after they have been deposited, prior to post. Financial institutions that have deployed Check Fraud Defender report significant reductions in check fraud losses. In 2025, the efficacy of any check fraud detection solution can be supercharged when fraudsters are prevented from ever introducing fake items into the banking system – in other words, by stopping check fraud at the “front door.” Biometric authentication provides a readily attainable way to do exactly that.
Why biometrics stop fraud at the “front door”
A large portion of check fraud occurs in the mobile channel, where legitimate customers can quickly receive daily deposit limits of up the $35,000 or more. Fraudsters know how to look the part, too, opening either real or synthetic accounts and establishing a minimal transaction track record to quickly reach high deposit limits. This is the point at which they can inflict the most damage on banks, quickly mobile-depositing and withdrawing against high amounts of bad checks in bust-out fashion, and then disappearing. (Related, numerous industry estimates say that at least 10% of the accounts at any given bank are synthetic.)
Banks can use biometric authentication to change some of their customer experience dynamics around availability and access to more deposit funds. If a customer has been validated and the bank has their biometrics, the customer has done step-up authentication, and the bank knows the customer’s transaction history, that customer is a low risk for check fraud. That customer can be allowed a higher deposit level, safely. Customers that do not provide their biometric information can be held to a much lower deposit limit, forcing fraudsters to come inside the branch to deposit large checks, and in doing so significantly increase the chances of their bad-check deposits being caught.
By using biometric authentication as a quick and easy screening mechanism, banks provide a superior experience to customers who deserve it, adding to their satisfaction with frictionless mobile banking.
Extending the familiar into a new realm
Simply put, biometrics are poised to transform fraud prevention in 2025, redefining financial security. Customers today feel secure with tools like fingerprint scans, facial recognition, and voice authentication, which are already driving a shift in the financial sector.
Consumers have become comfortable in providing biometric data because they are getting a benefit in return. All day long, consumers provide a constant stream of biometric data to access their phones, banking apps, telco apps, and myriad other conveniences. The data flows into phones and on to wireless service providers; when a consumer wants to use two-factor authentication (2FA), there’s an integration with the banking or other app.
In this way, biometric authentication can be extended to reduce not just potential fraud exposure for checks, but for all other transaction types, too. Biometrics additionally address compliance requirements, aligning with regulatory foci on payment risks, KYC, and anti-money laundering. As consumer trust in biometrics grows even further, financial institutions are likely to adopt this technology to enhance security, ensure compliance, and improve customer experiences.
Biometric authentication without the data risk
Rising fraud losses are a catalyst for banks’ embrace of biometrics as a critical component of identity and fraud protection strategies. And not a moment too soon – advances in generative AI enhance biometric authentication capabilities while helping to protect against fraudsters who also exploit cutting-edge tools.
In the past, the financial industry has been reticent to adopt biometrics, largely due to concerns about the potentially catastrophic impact of a breach of their stores of biometric data. Their data breach concerns are absolutely legitimate; as of the end of December, 46% of financial institutions had suffered a data breach within the prior 24 months.
Mitek uses a multi-layered approach to deliver biometric security by design. Through our proprietary solutions for verifying, validating, and storing biometrics, we strongly protect against reverse engineering and data access security risks.
Using the latest in security protocols and storage standards is a must when it comes to protecting customer information and data, to not just achieve regulatory compliance – which is a given – but also to “do the right thing” for customers. Mitek adheres to the highest security standards with the data customers trust us with, to enable reliable and ongoing fraud protection.
For example, biometric data is stored in AWS and is secured on multiple levels, starting with a protected API gateway with limited and controlled access. Encryption keys are automatically rotated, with data access and activities monitored 24/7/365. Mitek customers are assigned a dedicated tenant location on AWS to ensure no commingling of data.
From a consumer perspective, no biometric data is stored on consumer devices; Mitek uses biometric templates that are mathematical representations, to inherently prevent reverse engineering. These templates are linked to consumer selfie images and audio recordings via a record number that ensures the biometric template can be immediately located, should a consumer or customer request their biometric template be deleted. Furthermore, customer data is protected using industry-standard security mechanisms to keep data encrypted in transit as well as while at rest.
In sum, these biometric data safeguards are further in point of fact that step-up authentication is a safe and invaluable way to improve customer experience and security by confirming identities, preventing fraud, and meeting regulatory demands. In 2025, customers will voice to financial services providers their preference for biometric authentication protection with, “If you’re not doing biometrics for me, you’re not doing me right.” Which side will your institution be on – will you be protecting customers by stopping more check fraud at the front door? Let Mitek help.
Learn more about how Mitek can help your business with biometric authentication
About Kerry Cantley - VP, Digital Banking Strategy at Mitek
Kerry Cantley is VP of Digital Banking Strategy at Mitek, leading the strategic expansion of Mitek’s Check Fraud Defender service, which detects forgeries and fraudulent activity across all deposit channels, otherwise missed by traditional fraud prevention protocols.