Whitney McDonald 11:44:41
Hello and welcome to the buzz of fin AI news podcast. My name is Whitney McDonald and I’m the editor of finaI news. Fin AI news has rebranded from bank automation news, marking the next step in our mission to lead the conversation on innovation and Financial Services Technology. Joining me today, Feb. 2, 2026 is Ati Azemoun, Vice President of Business Development at Paris. Script, Atti is here to discuss the state of check fraud, what to watch for, and how AI can combat rising check fraud attempts. Thanks for joining us.

Ati Azemoun 11:45:11
Hi, Whitney, thank you so much for having us here, having me here with you. My name is atti azimun. I’m part of the business development team here at Paris script. And parascript is a recognition technology company. We’re celebrating our 30th anniversary this year. We’re one of the engines behind a lot of FinTech solutions out there as it relates to automation, process improvement, as well as fraud prevention solutions that are available there. We’ve been doing this with some of the large brands, and very, very happy to be here to talk a little bit more about AI in the check fraud solutions area with you.

Whitney McDonald 11:45:54
That’s great. Well, again, thanks so much for being here. Check fraud is an interesting topic because of where we stand today with technology, you would think maybe there’s less check fraud happening or less checks being written. But, you know, that’s not necessarily the case. Maybe before we get into the role of AI, we can kind of talk through the state of check fraud today what you’re seeing.

Ati Azemoun 11:46:17
Yeah, so checks are still very much in use. They hold a lot of value in that they are used in a lot of unique payment scenarios. Although they’re on the decline. There’s about 10 to 11 billion checks circulating today per year that’s holding steady for past couple of years, and unfortunately, what’s been happening is the forces have been amplifying their attacks, and that’s been a almost doubling effect over the past three, three to four years, and they’re just relentless. We’re seeing a lot more of that through our channel partners, and it doesn’t seem to be going away. It’s a big problem for many institutions. The check fraud surveys that have been happening over the past few years, they’ve been reporting year on year increases. The Fed has mentioned that compared to 2023 and 2024 there was about a 10% increase by their respondents to their surveys on the number of check fraud incidents that they’re seeing, and within the 2025, AFP Fraud Report by by their respondents, They saw about a 63% of those respondents also mentioned that they’re seeing actual losses, so it’s a growing concern for many.

Whitney McDonald 11:47:46
Now, maybe we can kind of talk about what some of those examples would be of of check fraud. What are you seeing? Where are the fraudsters, you know, changing their strategy? Are they using AI? Maybe talk through what an institution could be looking out for sure.

Ati Azemoun 11:48:03
Well, what we’ve heard is that a lot of mail theft is a growing concern. Good checks are being intercepted. Those items are being purposed for fraudulent activity, and that can range from a good check that’s written for a payment, it’s being intercepted and a bad actor is going in there and washing that check or or perhaps using the base structure of that check to duplicate it through their own AI means, and to replicate and then publish that to the in on the dark Web. We’re seeing a lot of that type of activity, and fortunately, there is technology to counter that. We’re able to look at those items and help catch those those activities. The forces are very good. They’re very innovative. They don’t have any concerns about how to use AI. They don’t care. They’re looking to get your money easiest way they can. And unfortunately, checks are vulnerable area in payments. So that’s an area that we’re seeing. We’re also seeing that use of AI to generate fake checks that’s continuing to be on the rise as well. So items that look very much like a check or a money order are being presented to financial institutions, often through unsuspecting actors, or perhaps folks that have become vulnerable. They are compromised, or they’ve been asked to do a favor, and they don’t realize that. They’re transmitting these items through for fraud. In some cases, we can see activities where a person is acting as a mule. They’re originating an account. They’re creating an account where this money can be pushed through laundered, and they’re looking to capture as much money as they can. And unfortunately, financial institutions, they want to serve their clients well, so what they do is they typically give some of the funds, if not all of the funds, to that account as soon as it’s presented. So what we’re doing is we’re trying to help catch the anomalies, identify those, those issues, earlier on in the process, to help reduce that type of fraud.

Whitney McDonald 11:50:21
Yeah, let’s talk about catching those anomalies. The role of AI obviously here can can be helpful to institutions. It’s kind of interesting to see both sides of the coin that you mentioned. AI is being used by the fraudsters themselves, by the bad actors, and then you’re also using the technology, you know, to catch these, or detect these, to detect anomalies and check fraud. Here, maybe talk me through how AI can do that.

Ati Azemoun 11:50:53
Yeah, so when a I guess if we, if we go back to the opening of an account, when an account is being opened, there’s usually a lot of background checks to you, so there’s inherently AI in the process of opening the account, looking into you, looking into your credentials, and we’ll be looking into onboarding the person, right? So that that’s that’s all happening, and AI is already a part of that process. When it comes to the checks that are being generated, there’s AI that can be embedded into the item itself, so that if a force that does look to capture, intercept and modify that item when it comes back, we can, we can analyze that item and spot the anomalies. You can’t really, 100% make the exact same item if you’re making copies of it. So we’ve, we’ve applied our learning throughout the years with our partners to investigate, analyze and capture these anomalies that can come back on altered items. So this, these are areas that we’re working on with our partners. And in the full account review, there’s a lot of AI around the behavior of the payments that are occurring, including the checks. So the financial institutions can be monitoring the accounts. They can observe what’s the usual utilization spot the anomalies that occur if there’s something outside of the norm that can raise an alert, and all of this is done through AI. Manual intervention isn’t really an option. You can’t continuously do that on a day to day basis, for the volume of checks that are coming in and the number of attacks that are always on the rise, and that’s what the forces are looking for. They’re looking to find vulnerable institutions who perhaps have all the technology that haven’t really ramped up their efforts. It’s not to say that the institutions are not not doing this. There’s already very good technology and products out there, however, applying newer technology with new AI to catch these anomalies in behavior in the instance of the payments themselves and the alterations that can occur within the item. That’s really what what we’re seeing, and that’s where, how AI is being applied today.

Whitney McDonald 11:53:14
Yeah, I’m glad that you mentioned that that piece there about volume. You can’t manually go through each check at scale, so using technology automation, AI to, you know, get that early detection into place and monitor at scale as well.

Ati Azemoun 11:53:33
AI is generally applied to help learn some of the common features of fraud in check fraud, artificial intelligence is really trying to analyze and make make life easier for the users, and applying the machine learning and algorithms to avoid those, those pain points, what we do is try to replicate that. So taking to context of, say, an example where checkbook is stolen, a bad actor wants to sign and imitate you as the person who owns the account. Well, there’s AI technology there available to compare against your signature, against the account that you opened, against the signatures that that you’ve made on previous checks, and we’re able to make that that comparison. So this type of AI technology embedded in the full system is really what’s helping to catch that type of anomaly. Also reading the payment document itself can be very helpful. For example, is it the right pay to the order off? Has that item. Been altered. So we have technology for financial institutions to protect themselves from alterations. Where we see the checker, item has been accepted, it’s been washed, and somebody else has put some other value or numbers or a name or to pay to the order of line, and we can see if that’s been altered. There’s also solutions that banks will work on today that offer services for things like payee match positive pay. And this is really AI technology involved, and that’s where you’ll see the Paris group technology embedded to do that type of analysis to see if the pay to the order of line is matching a payee positive pay scenario, and these are areas that that we see quite, quite regularly. Again, we do a lot of this work with our partners. They are building very strong, robust AI systems, and it’s looking at some of the behavior of the transactional history, to the account, to the individual, and the institutions are looking to catch the fraud based on what what they see and what they know about about that person, going back to the printing of the check itself as a payment document, there is technology that can be embedded into the into that printed item. We have an ability to understand that it’s your check again, something that’s being captured replicated, can’t ever look the same as it was in the first instance. As good as the forces are, we’ve also created a pattern to technology to embed your details around your signature only to you that can be verified when the item comes back. So if there’s any alterations, we’re going to identify that is a direct match and a fit to your account and your your your check stock and to you versus somebody else. So those things are really where we’re seeing a lot of advancements. It’s it’s connecting the dots. It does require collaboration with our financial institutions and our partners. However, that’s what’s really helping to minimize and impact the catching of of the the check forward.

Whitney McDonald 11:56:57
Maybe we can talk here about early detection and how important that is in the fraud detection process.

Speaker 1 11:57:06
Yeah, so I mean, certainly the process is, is very

Ati Azemoun 11:57:10
important, because the forces are depending on the lag time of processing a check and the more we can do at the point of presentment, the better it is. So how do we do that? We know what a check looks like. We’ve been monitoring this over many years, and we can, we can identify those changes working with the bank. The bank has a profile of you, your account, your checks. We can analyze and identify what are good items versus one that’s coming in foreign to the account, and that’s really how we go about flagging that item. Now the decision is still with the financial institution. They have to know the person. They need to understand the behavior of the payments that are happening, and then they can make a decision whether to hold postpone that that payment out to the account. And that’s really where is helping. Historically, that’s not been the case. A lot of the older products will go to what we can say is a day two process. So it’s they immediately serve the client, they help them out with getting that deposit into the account. But then it’s a case of, you know, how do we make sure it’s good, how it’s cleared? And if there’s an anomaly, now we have to go back and chase the monies that were sent by accident. The other thing that we found is forces will create a scam. They’ll they’ll make the person go ahead and deposit a check the person doesn’t know it’s a bad check they may have overpaid. So as much as the the check can be sort of recovered or funds re appropriates back to the person, the same person that’s on the tail on the receiving end of that scam is also asked to say, well, I overpaid you. Can you? Can you send me my money back? And that’s where they’re losing the money. So the individual is losing out, the the bank is the credit union is losing out because they’re having to go through all these steps to recover the funds and and all of that can be minimized if you can have the point of capture awareness alerts all the way down the stream. And that’s, that’s really what we’re seeing, the importance of early detection.

Whitney McDonald 11:59:26
Yeah, thanks for breaking that down. It’s, it’s important to note, you know, there’s still losses involved, even if there is recovery or even if there are steps that the institution can take. Um, there can still be losses, you know, incurred during, during the whole scam process. Now, to put a little context around how much, how much check fraud you’re seeing, what parascript is stopping. Is there any way to quantify check fraud that parascript is stopping?

Ati Azemoun 11:59:58
Yeah, from my role is very much a case of work with our partners. We’re very fortunate to be with a number of really great companies that do an excellent job in this area. And what we’re seeing is kind of mirroring the Fed’s observation of a 10% increase in reported activities of losses and fraud. We’re seeing a similar type of uptick in demand for for the newer technology. So I would say that’s an indicator for us. We are also fortunate to see firsthand at times with financial institutions who report, you know, what they’re seeing, how they’re seeing, what they’re doing. A group found that they were able to reduce the operational costs. In that process that I mentioned, they saw a huge reduction in the number of layers of work that they would typically have to do. They went from in their process of claiming the checks from, you know, 50 to 60 in a given quarter down to about five because they had the early, early detection. So that type of experience is very helpful for us to learn and to know that we’re making an impact. But again, we can’t do that without our partners, and they, they do a great job of standing up our technology and moving these improvement points to our final customers, which are the banks and credit unions. And the other area is in terms of fraud losses, again, reportedly just from a another community bank. We found that in the last year they implemented the software around about the half year mark, they saw within the few months that they prevented around $50,000 in losses. And they did the calculation look back on the full process in the previous year, and had they implemented it earlier in in the year before they were looking to save around $250,000 in losses. So those are the indicators that we see, and unfortunately, through the same channels, we get the correspondence and note that the attacks are still increasing, so it’s a problem, and we’re working with our partners, with participating final institutions, to help observe and improve on all

Whitney McDonald 12:02:19
of that. Yeah, that makes sense. I mean, the fraudsters haven’t stopped you. You got to take the wins where you can but those are great examples. And thanks for for, you know, putting that into context a little bit, those numbers speak for themselves. So thanks for sharing that. Now, obviously, we’re at the start of the year. We’re kicking off the year you’ve got different plans in place. Obviously, fraud is something that’s top of mind for all institutions. What’s something that that financial institutions can can put into place? What should they be paying attention to? What? What could really help them to monitor fraud, reduce fraud, things that they should be looking out for in the year ahead, as we have kind of a clean slate in the new year.

Ati Azemoun 12:03:03
Yeah, I would say education awareness to the to the frontline operations is always helpful, just regular updates, just to be on the lookout for for these things, and also to challenge your existing technology providers. Yes, you’ve probably invested in very good, robust systems. Always ask for that little extra. We all want to support you better as financial institutions, and want to help you to protect your reputation with your clients. So I think education, challenging the norm, asking about what’s what’s there, and implementing new strategies so that can be the front of capture, sort of solutions that are available now and and work with with your technology teams. The extension of all of this is, you know, we want to help prevent fraud. There’s always a crossover. As much as there may be a a check fraud incident, it’s very likely that those same actors are attacking your clients on the digital front as well. So it’s a network of activities. Nothing operates in a silo. And raise those questions, I think that’s the that’s the key part.

Whitney McDonald 12:04:23
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Transcribed by https://otter.ai