SPECIAL BONUS EPISODE 01: Jordan Bennett on ACH Risk Management Evolution

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Episode Summary
This episode was recorded live at the Annual Payments Management Conference, this year NEACH celebrated its 50th Anniversary.

In this episode of Wrestling Payments, host Joe Casali welcomes Jordan Bennett from Nacha to delve into the intricacies of risk management for ACH payments. They discuss the evolving role of the Risk Management Advisory Group and how it aids financial institutions in mitigating risks on the ACH network. In addition, Jordan shares insights the current Nacha Request for Comment on proposed Rule Changes, emphasizing the importance of feedback and adjustments to perfect the system.
The conversation takes a deeper dive into the proposed rules for combating fraud. Jordan explains the potential use of reversals to return funds to the originator, which could significantly impact how financial institutions handle fraudulent transactions. They also discuss the new use of a return code, R 17, to specifically flag suspicious transactions.
Towards the end, the discussion shifts to the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement and the implications for risk management. The episode concludes with Jordan's advice for professionals in operations, encouraging them to stay aware of organizational changes and fill gaps where necessary.
Guest:
Jordan Bennett, AAP, APRP
Senior Director, Network Risk Management
Nacha
Key Insights
The Evolving Role of the Risk Management Advisory Group
The Risk Management Advisory Group plays a crucial role in mitigating risks on the ACH network. Jordan explains how the group is continuously refining rules and regulations to ensure the safety and efficiency of transactions. The process involves gathering feedback and making necessary adjustments to perfect the system. This insight underscores the importance of dynamic risk management in the rapidly evolving payments industry.
Proposed Rules for Combating Fraud
Jordan discusses the potential use of ACH REVERSALs to return funds to the originator in cases of fraudulent transactions. This proposed rule could significantly change how financial institutions handle fraud. Additionally, the introduction of a new return code, R17, is discussed. This code would specifically flag suspicious transactions, providing another layer of security in the ACH payment process.
The Future of ACH Payments
The conversation shifts towards the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement. This could have significant implications for risk management in the payments industry. Jordan also encourages professionals in operations to stay aware of organizational changes and fill gaps where necessary, highlighting the importance of adaptability in this rapidly changing field.