Secure Real-Time Payments With Smarter Controls By Ben LeClaire, Principal, and Matt Babicz, Senior Manager Plante Moran, ICBC Silver Associate Member Real-time payment increases speed and fraud risk. However, layered controls, smart friction and continuous operations help financial institutions manage threats while keeping payments fast and reliable. WHAT ARE REAL-TIME PAYMENTS? Real-time payments are instant, account-to-account payment transactions that settle and post within seconds, operate 24 hours a day, 365 days a year and are generally irrevocable once authorized. This speed improves customer experience and liquidity, but it also compresses fraud detection and response windows, requiring controls and operations that function in real time rather than in batch cycles. The arrival of real-time payments and the FedNow Service, a relatively new instant payment infrastructure through the Federal Reserve, has transformed payment processing for community banks. Settlement now happens in seconds, and so does payment fraud. ARE INSTANT PAYMENTS SAFE? Yes — but only when they’re operated with controls built for speed. The challenge isn’t to slow down; it’s to make speed safe and to prove it with metrics and evidence that stand up to scrutiny from customers, auditors and examiners. Financial institutions need to build in real-time controls that pair instant settlements with 24/7 monitoring, clear decision rights and trained teams who can act quickly. FRAUD MOVES FAST — YOU NEED TO MOVE FASTER Picture this: It’s late on a Friday night. A member calls, saying, “This transfer isn’t mine.” The payment is already settled. Your team has only minutes, sometimes seconds, to validate the alert, reach the member and trigger a hold or recall. Real-time payment rails reward institutions that can act at 2:00 a.m. as well as 2:00 p.m. The difference between a contained incident and a write-off lies in your operating model and in whether your controls are built for seconds, not days. Traditional, batch-era controls don’t generalize to irrevocable push payments. Decision windows have collapsed, and fraud can move as fast as the money. Community institutions have a local trust advantage, but preserving it requires controls that are both effective and explainable. REAL-TIME FRAUD DETECTION: HOW TO BUILD A LAYERED CONTROL STACK Successful institutions don’t rely on a single defense. Instead, they build a layered stack that applies just enough friction to stop fraud without taxing legitimate customers. 1. Establish Network and Participant-Level Limits Start with hard guardrails: network and participant-level limits sized by customer segment, dynamic negative lists that update in real time and velocity thresholds that flag unusual patterns. These controls should be tuned to treat a new device and payee after-hours differently from a routine payroll transaction. 2. Add Intelligent Friction Contextual step-ups, like callbacks or out-of-band confirmations, should trigger only when risk spikes, not on every bill pay. Behavioral analytics layered with rules help surface mule-account patterns, account takeovers and social engineering attempts — giving you both lift and explainability. 3. Collect Audit-Ready Evidence Finally, operational proof matters. Unified dashboards, service-level agreement (SLA) timed alert queues and runbooks for freeze/recall decisions ensure your team can act quickly and consistently. After-action kits, including logs, thresholds, change tickets and customer communications, should be ready for audit or exam review. Evidence isn’t a byproduct; it’s part of the control. 16 | INDEPENDENT REPORT
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