Fraud Expert Ken Palla on Why Detection Controls Still Lag Behind
Fraud continues to climb even as banks invest heavily in detection tools and analytics. The gap between technology spending and fraud losses reflects a deeper issue in how financial institutions approach scam prevention. Ken Palla, retired director at MUFG Bank, said banks need stronger controls that stop funds from leaving accounts, not just systems that flag suspicious activity.
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“What you should be looking at is how many times you have had something that you believe was a scam, and you basically stopped the money from leaving the bank,” he said.
Faster payments increase this challenge by shrinking response windows and adding urgency. “Faster payments is what the fraudster loves,” he said. “All these scams are psychologically driven. You’ve got to do it right now.”
In this video interview with ISMG, Palla also discussed:
- Global trends in scam controls and regulatory approaches;
- The role of staff training in scam intervention;
- How artificial intelligence supports fraud detection and customer interaction.
Palla helped shape the initial responses to the U.S. 2005 and 2011 FFIEC Regulatory Guidance to improve online security for U.S. banks and served as an adviser to the RSA Conference eFraud Global Forum. He previously was a member of the program committee for the annual RSA Conference in San Francisco.