Case Studies

Frontier Bank Success Story

“Utilizing eFunds’s identity verification technology for USA PATRIOT Act and OFAC compliance provides our institution with a comprehensive, easy-to-use and cost-effective tool to meet our regulatory mandates. We easily incorporate the solution into our overall compliance program which reduces the bank’s risk levels, protects against fraud and increases our operational efficiencies. In addition, working with eFunds and now eFunds has been a very positive experience. eFunds treats customers with fast, personalized attention. The reason the product performs so well for financial institutions is because it was designed specifically for PATRIOT Act compliance and is updated regularly by the suggestions from the bankers who use the product.”

Maria Roush, Vice President Branch Administration/Compliance at Frontier Bank.

Overview
Frontier Bank provides full community bank services to consumers and businesses throughout Georgia and Alabama. The bank and its nine branches are focused on offering a wide variety of retail and commercial banking products that fit the needs of customers within their communities.

Challenges
After the enactment of the USA PATRIOT Act, Frontier Bank focused on building a comprehensive CIP strategy that would comply with the USA PATRIOT regulations without overburdening CSRs throughout the organization. Instead of creating a separate initiative for USA Patriot compliance, the leadership team felt the program should be integrated into the overall new account opening process as well as an integral tool in the compliance monitoring system.

At the same time, questions had to be answered about how to prevent identity fraud which threatened the bank, its’ customers, and the bottom-line. With the rise in identity fraud and especially the use of forged or fake identity documentation, Frontier Bank wanted to stay one step ahead of the “Bad Guys” and face the issue directly and immediately.

Solution
The bank’s compliance team reviewed a variety of options to meet the regulatory mandates, increase efficiencies, and protect against identity fraud. After evaluating the manual option as well as the various automated tools, Frontier Bank chose the ChexSystems Identity Manager solution because it provided a comprehensive, yet simple, solution that didn’t increase customer acquisition costs.

The solution easily integrated into the new account opening process without increasing the amount of time it takes to open an account. Whether on the loan or deposit side of the bank, CSRs simply check the Jack Henry system to see if a prospective customer has been verified. If not, the customer’s identity information is cross referenced against more than 23 billion aggregated records from multiple data sources. The Identity Manager solution corroborates that the name, social security number, address, and date of birth are valid and associated with each other. Frontier Bank can now make an educated decision about the accuracy and truthfulness of the identity information and determine if the person is on any government watch list. CSRs then pull an online ChexSystems(sm) New Account Chex report through Identity Manager to decide if a relationship with this individual is a good risk.

Detailed monitoring of the compliance program is possible because all data is stored within Identity Manager for future analysis and examiner review. For each new account, CSRs note what transpired and all documentation including the ChexSystems report is stored within an individual’s Identity Manager record. Every record can be reviewed and updated by the quarterly internal audit team to ensure transactions were completed correctly and to guarantee that the institution’s policies are being followed throughout the organization. Frontier Bank can easily showcase their diligence and adherence to USA PATRIOT Act compliance to examiners.

Verifying the identity of prospective customers was driven by the USA PATRIOT Act, but the bank believes this business practice would have been endorsed eventually because of the important advantages of true verification. Identity verification helps stop criminals from opening a new account and is the easiest and most cost effective way to reduce the bank’s risk and compliance burden. Identity Manager ensures that Frontier Bank has an extensive identity fraud prevention program in place.

Maria Roush and the team at Frontier Bank believe that the deployment of Identity Manager continues to have an impact on the institution’s operational efficiency and customer service levels. USA PATRIOT Act compliance has been accomplished. For Frontier Bank, “Knowing the Customer” is more than a marketing slogan, it a critical piece of the compliance and risk puzzle.

Benefits

• Completely Comply with the USA PATRIOT Act Section 326, 314(a) and OFAC: Verifies identity, government list screenings, record retention, and CIP documentation requirements.

• Increase Operational Efficiency: By integrating into the new account opening process & accessing other products within theChexSystems Product Suite.

• Improve Compliance Monitoring: The institution can review data, insert comments, and prepare for regulatory examination.

• Reduce Identity Fraud: With Identity theft and fraud on the rise, Frontier Bank has the assurance that customers are “who they say they are” and can avoid issues involving fraud before they happen.