The FBI estimates that there are billions in wire fraud losses attributed to business transactions each year.  A large portion of these losses occur in the closing of residential mortgage loans.  Trillions in mortgage proceeds are transferred to attorneys, title agent and escrow officer every year, with consumers anxiously awaiting their arrival so that they can take possesion of their new home.  Too often the settlement of these transactions are marred by business email compromise and otherfrauds that can cause transactions to bust and consumers and banks to suffer financial losses.

Third party risk, or counterparty risk, is an area of extreme importance andrequires lenders to know who they are doing business with to protect themselves and consumers from harm.

A combination of risk assessment and monitoring as well as wire verification is necessary to overcome the increasing threats that cyber criminals pose to banks and consumers.  In the past decade new approaches to risk management and wire verifications, including KYB and KYC tools are beginning to deter criminal actors and reduce losses.

This discussion will cover risk assessment (third party vetting), risk monitoring and scoring, idenity verification and wire verfication methods that have evolved over time,  It will also discuss the reluctance of some business owners to emrace the education, training, operational procedures and tools that can help them avoid fraud losses.