ACH Fraud , Finance & Banking , Fraud Management & Cybercrime

Fresh Nacha Rules Push Banks to Revise Policies, Procedures

Nacha's new ACH rules require all banks to update policies and procedures to ensure better fraud detection. These changes help banks comply with new standards without relying solely on technical solutions, said Devon Marsh, managing director of ACH network rules and risk management at Nacha.

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Marsh said one common misconception about the National Automated Clearing House Association's new rules is that they require a technical solution for monitoring potential fraudulent activity. "In fact, it doesn't," Marsh said. "If there is a human-based process, that's perfectly fine. That satisfies the requirement of the rule."

He also pointed out that receiving banks now have greater responsibilities to spot fraudulent transactions. For example, if a business transaction is posted to a consumer account, it could signal fraud. Receiving banks should pause and examine such transactions closely, even if they involve small or uncommon details. Moreover, receiving banks can now return transactions to the originating institution without waiting for a request if they detect something unusual about the transaction. This proactive approach can help banks identify and respond to potential threats before they escalate, Marsh said.

In this video interview with Information Security Media Group, Marsh discussed:

• The importance of revising policies and procedures for compliance with Nacha's new rules;
• Misconceptions about the need for technology versus human-based processes;
• Examples of how banks should handle suspicious transactions under the new guidelines.

Marsh joined Nacha in 2022 after a 26-year career in banking. He has worked in operations, risk management and payments strategy, all in support of electronic payments.