Nov 22, 2010
First Data, Laru offer ACH risk management
U.S.-based transaction processor First Data is stepping up ACH (automated clearing house) security protection for online business banking users via a link up with ACH risk management firm Laru.
First Data currently protects ACH transactions via measures such as multi-factor security and transaction limits, says Cindi Lieblich, Vice President of First Data’s FundsXpress online banking platform. “With rapidly increasing ACH volumes and growing regulation, financial institutions are asking for higher security, and that is why we are working with Laru,” she says.
A recent ACH rule change from Nacha, the U.S. electronic payments association, effective June 18, 2010, requires financial institutions to perform risk assessments of all their ACH origination traffic.
Folsom, California-based Laru develops ACH risk management, compliance and fraud detection and prevention applications for financial institutions. Its ACH Clarity product works with transaction files before they are sent out to processors. ACH Clarity checks both inbound and outbound ACH transactions against historic data provided by the financial institution and creates alerts for out-of-pattern anomalies.
Clarity is available for in-house use by financial institutions and as a service hosted by Laru, says Laru’s President Rajiv Donde.
ACH Vision, slated for introduction in 2011, is a complementary product to ACH Clarity which pre-empts and quarantines problem ACH transactions. “ACH Vision is in Beta trial with a few customers and will be released in 2011,” Donde says. “The product works with standardized core transaction files and will be available for use by all processors.”
Initially, First Data and Laru have made a long-term, renewable financial referral agreement, but they are looking at integrating their products in 2011, Lieblich says.