Wire transfers remain a critical payment method for financial institutions, requiring a structured process to ensure security and compliance. However, the way institutions handle wire origination and verification can significantly impact transaction speed and fraud prevention. Many financial institutions still rely on manual processes, which can introduce delays and vulnerabilities. Adopting real-time verification methods can mitigate fraud risks while improving the overall customer experience.
Wire Transfer Requests: Collection Methods and Verification
Financial institutions receive wire transfer requests through multiple channels, each with its own respective set of security and compliance considerations. These requests are:
- Branch requests – Customers may initiate wire transfers in person, requiring front-office staff to verify identity, confirm account balances, and collect necessary details before routing the request for approval.
- Phone requests – Some institutions accept wire requests over the phone, adding another layer of verification, such as call-back authentication, to confirm legitimacy.
- Digital banking – Online and mobile banking platforms allow customers to submit wire requests remotely. These transactions typically integrate with fraud detection tools to analyze risk factors before proceeding to approval.
Once a wire request is submitted, financial institutions perform a series of verification checks to confirm legitimacy and reduce fraud exposure. These include:
- Balance checks – Ensuring the customer has sufficient funds to complete the transfer while monitoring account activity for unusual patterns.
- Customer verification – Confirming the identity of the sender using multi-factor authentication, document verification, or digital signatures.
- Callback procedures – Some institutions require a manual phone confirmation to validate high-risk transactions, which can introduce processing delays if the customer is unavailable.
Challenges of Manual Verification and Fraud Prevention
Despite these security measures, institutions that rely on manual processes face significant challenges in preventing wire fraud and ensuring regulatory compliance. Common issues include:
- Processing delays– Manual verification requires human intervention, delaying transactions and increasing the risk of missing processing cutoffs.
- Human error – Reviewing wire details, customer authentication, and fraud screening manually increases the likelihood of oversight.
- Fraud detection gaps – Without automated risk assessment, fraudsters may exploit weaknesses in verification procedures, such as impersonating a customer over the phone.
- Operational inefficiencies – Institutions using fragmented systems or paper-based approvals often struggle with inconsistent record-keeping, making it difficult to track approvals and detect anomalies.
Why Real-Time Verification is Key to Preventing Fraud
As fraud tactics grow more sophisticated, traditional manual checks are no longer enough. Real-time verification allows financial institutions to authenticate wire requests instantly, reducing processing delays while strengthening security.
By integrating real-time fraud detection tools, financial institutions can assess transaction risk, flag suspicious activity, and require additional authentication only when necessary. Automating verification also enables a more seamless customer experience, reducing unnecessary delays while ensuring compliance with wire transfer policies.
Financial institutions that adopt automated wire origination and verification processes can minimize fraud risk, improve operational efficiency, and provide customers with a more secure and reliable wire transfer experience.
Alacriti offers the automation you need and the ability to configure workflows that embed these necessary fraud detection tools in your wire process. Orbipay Payments Hub for Wires solution empowers you to deliver the speed and convenience your end accountholders expect, while giving staff the efficiency and ease of use they need.
For in-depth information about wire modernization, watch the webinar Wired for Tomorrow: Optimizing Wire with ISO 20222.
Orbipay Payments Hub for Wires is a comprehensive solution that prepares financial institutions for the future of wire service automation. By adopting this cutting-edge platform, banks and credit unions can significantly reduce costs, manual labor, and errors in their wire processing. With features like end-to-end automation, real-time FX services, and seamless integration with multiple payment rails, Orbipay ensures a secure and scalable wire transaction process.
