Alloy’s Fraud Platform Gives CUs a Proactive Solution
- Roy Urrico
- 3 minutes ago
- 5 min read
By Roy Urrico
Preventing fraud at credit unions should not impact the bottom line or the member experience. That is the position of New York City-based Alloy, which delivers identity risk solutions to credit unions and banks through a platform that can also amalgamate multiple fintech vendors and solutions through a single interface.
“At Alloy, we have built an identity and fraud prevention platform for financial institutions. The platform is used for both compliance and fraud risk, but with fraud on the rise, and more sophisticated than ever, we are seeing more and more credit unions and banks turn to Alloy to solve fraud while also optimizing for growth and member experience,” Sara Seguin, principal advisor, fraud and identity at Alloy, told Finopotamus.
By creating a single pipeline, Alloy allows financial institutions (FIs) to gain clarity on applicants while separating good accountholders from risky ones. From there, FIs can create unique workflows for applicants based on their riskiness making it easy to streamline member experience while also managing hazards.
Helping Credit Unions
Citing Alloy 2025 State of Fraud Report, Seguin noted credit unions reported millions of dollars in losses due to fraud last year. “We tackle identity risk by understanding credit unions and their members thoroughly from day one — before any funds leave their accounts.” This shifts strategy from reactive to proactive protection, suggested Seguin.
“We help credit unions fight sophisticated fraud while improving member experience—two goals that historically have been at odds,” said Seguin. By increasing automation, credit unions can reallocate the resources needed to combat fraud. “That’s our ultimate goal — enabling credit unions to focus on serving members rather than fighting fraudsters.”
An example is the $4.54 billion Westbury, N.Y.-based Jovia Financial Credit Union (240,000 members) that was unable to separate risky applications from genuine ones in real time. As a result, there were times Jovia had to turn off their online application form and stop instant booking of accounts in order to manually review 100% of applications. This cumbersome process created a significant backlog and restricted new members from onboarding during a critical growth period. Detecting fraud required a new set of combat tools, pointed out Seguin.
Jovia implemented the Alloy platform in January 2023. Evan Get, project manager at Jovia, recalled, “After we introduced Alloy, within a couple of weeks, there was a 20% drop in fraudulent applications. We had been running deposit performance checks on applicants. After implementing Alloy, we were able to save the cost of these checks for fraudulent individuals. This cost savings covered the monthly expense of using the Alloy platform. Additionally, since we were not running deposit account checks on these members, the compliance burden was reduced.”
Flexible Platform for Modern Fraud Protection
The Alloy platform is fully cloud-based, which Seguin describes as “essential for the flexibility that modern fraud prevention demands. With Alloy, credit unions do not need to build and invest in extensive infrastructure to stay protected.”
The cloud architecture also supports scaling across different channels, said Seguin. “For example, our client, Consumers Credit Union ($2.3 billion; 144,000 members) smoothly expanded from digital to in-branch applications after implementing our solutions, with business onboarding coming next — all without significant additional infrastructure investments.”
Kalamazoo, Mich.-based Consumers Credit Union implemented Alloy in 2019 after evaluating several platforms. “We were looking for a solution that could transform our digital onboarding experience by orchestrating multiple data vendors, automating decisions, and future-proofing our fraud prevention strategy,” India Hoskins, data and analytics manager at Consumers, explained to Finopotamus.
Consumers gave the Alloy platform a beta-test drive. “We conducted extensive testing before full implementation. Our previous system relied on a single vendor's confidence score, which often fell short. During beta testing, we were impressed with Alloy's ability to categorize different fraud types in a unified workflow,” Hoskins added.
“Alloy’s solutions also allowed us to back test previous applications when introducing new data sources, giving us confidence in the platform's effectiveness before going live,” said Hoskins. “This testing confirmed Alloy could deliver the automation and flexibility we needed while reducing our fraud vulnerability.”
Hoskins pointed out the credit union needed a solution that would let them stay agile against new fraud threats while ensuring secure, personalized experiences. “With our high lending rates and growth commitments, automated fraud prevention became a strategic necessity.”
Integrated into the Digital Transformation Strategy
The installation of Alloy was part of Consumers’ digital transformation strategy. Explained Seguin, “Our platform automates new account application decisions. Specifically, Consumers implemented a much faster, auto-decision rate, dramatically reducing manual reviews and when the CU faced a suspected bot attack, we quickly provided workflow changes that stopped it without taking their application process offline.”
“Now, we are able to shift our focus toward areas of growth, because we do not have to spend so many resources on fraud. We have been able to designate resources for think tanks to ensure we are constantly evolving and expanding. Our loan growth has been increasing by 12% year over year, which is a remarkable achievement considering that many organizations are content with maintaining a flat growth rate," said Hoskins.
With stronger and more automated fraud prevention processes in place, the Consumers team, maintained Hoskins, can spend time optimizing their fraud strategy even further and focus on other growth-oriented initiatives.
Among the other tangible results measured by Consumers:
A 78% auto-decision rate for onboarding – up from their previous state where every application required manual review
A 96% reduction in the ability to implement policy changes
A 500% return on investment (ROI).
“Prior to implementing Alloy, our approach to fraud was reactive,” said Hoskins. “We relied on existing models, but when fraudsters exploited vulnerabilities in those models, we had to quickly address those gaps. This often meant interrupting our operations to find solutions for combating the latest fraud tactics. Additionally, the significant time spent on manual member research led us to realize that there had to be a more efficient approach."
An additional benefit from transitioning to Alloy affected the Consumers’ member experience. “Before, every application required some manual review through a time-consuming and rigid process,” said Hoskins. She noted, new account approval times improved dramatically, delivering a faster and more seamless experience for customers. “Subsequently our loan growth has increased 12% year-over-year – remarkable when many institutions struggle to maintain flat growth.”
The Michigan credit union also expanded digital to in-branch channels by adding Alloy's Journeys, which allows organizations to organize application processing workflows into a single configuration and application programming interface (API) endpoints within the Alloy platform. “Alloy's Journeys functionality made it easy to add new channels and policies instantly without dedicated engineering resources,” said Hoskins.
The installation of the Alloy platform has had other tangible results for Consumers. “For every dollar we spend on Alloy, we save $5 in fraud losses, a remarkable ROI that has enabled us to shift our focus toward growth initiatives.”
Looking ahead, Hoskins said, “After our initial success with Alloy, we are expanding beyond digital channels to in-branch operations and business onboarding. Ultimately, Alloy has given us the confidence to grow without constant worry about fraud losses.”