Combating cheque fraud a priority
ABU DHABI 23 January 2019: Counterfeit cheques currently expose banks, businesses and customers to financial, image and legal risks, and with sophisticated printing technologies, incidences of fraud have increased.
This phenomenon has led the UAE Banks Federation (UBF), to combat such risks, including the hosting of a workshop, in coordination with the UBF IT Committee, dedicated to addressing new and innovative approaches in combating cheque fraud. The workshop identified proposed improvements to the current cheque verification process, specifically how changes could be made to limit incidences of fraud and support the nation’s move towards becoming a cashless society.
How it Works
During the workshop, UBF speakers stated that going forward, member banks would increasingly seek to make use of QR codes to improve cheque security, introducing enhanced encryption technology to discourage fraud.
The new automated approach is expected to use a cryptographic protocol, a one-way identifier – called a HASH – which uses an algorithm to combine a random number with a Magnetic Ink Character Recognition (MICR), data. It will see individual cheques allocated a random number that can then be read electronically during an automated validation process. The number is unique to the specific cheque and will ensure that only legitimate cheques will be honoured by banks, said Wam.
AbdulAziz Al Ghurair, UBF Chairman, said, “We are committed to enhancing the security of the UAE financial system and today’s announcement is further evidence of our collective desire to tackle the issue of cheque fraud.
“By introducing technology that allows us to detect problems in real time, we are confident that we can lessen the impact of fraud on our customers. In addition, these changes will improve operational efficiency, reduce costs and lay the foundations for further innovation that will benefit the banking sector,” he added.
The workshop witnessed large attendance from IT, Operations and Fraud Prevention divisions from UBF member banks, with the Federation planning to organise further programmes to confirm the execution of this initiative with the aim to combat cheque fraud in the banking industry.