Before modern technology, how did financial institutions protect against fraud and identity theft?

Question

Before modern technology, how did financial institutions protect against fraud and identity theft?

In: Economics

Answer 1

Any basic banking induction course would tell you that Anti-Fraud / Money Laundering / etc are catching up to fraudsters – bankers are never *ahead* of fraudsters. Therefore, it was only when fraudsters used modern technology that bankers needed to respond in kind. When fraudsters didn’t use modern technology, financial institutions didn’t use it either. So to answer your question specifically as to how: back in they day it was done manually, by people, because the fraud was done manually, by people.

What countermeasure is done depends on what type of fraud you’re talking about; but whether it is wire fraud, cheque fraud, account takeovers, or whatever, most of it comes down to ensuring the customer in front of you is who they say they are and doing the legitimate thing they say they are doing – technology or not.