Successfully verifying the ownership of an applicant’s bank account is crucial to mitigating fraud in your underwriting process. However, the problem that currently exists for financial service providers is creating a frictionless experience for their applicants. We will discuss the methods currently available and the advantages of using a non-credentialed, automated process.
Several options currently exist for verifying bank account ownership, including the use of physical bank statements, manual three-way bank calls and bank aggregation services. Though these methods all provide some level of confidence that the bank account supplied belongs to the applicant, they create friction and significant drawbacks.
Physical Bank Statements
The use of physical bank statements causes friction for consumers and opens the door for fraudsters. With the shift from brick and mortar to online lending, the convenience for an applicant to simply provide a paper copy of their bank statements is lost. Online lending requires applicants to locate a scanner and upload the document. This process can take minutes, hours, or days to complete. Once the applicant successfully uploads their statements, the opportunity for fraudulent behavior is presented. Using computer software to alter the statements to change the owner, balance, etc. is a common trend in the financial industry. Obtaining these types of doctoring services is as simple as searching the internet.
Manual Three-Way Bank Calls
Calling the applicants bank is a safer alternative to accepting physical statements and a method used by financial service providers for decades. However, this method presents its own limitations, the greatest being the inability to verify bank accounts during non-banking hours. This hindrance prevents companies from approving customers 24/7/365.
Bank Aggregation
Bank aggregation technology has seen significant evolution and public adoption over the last few years. Yet, consumers still feel wary providing their banking credentials online. Convincing applicants to supply their credentials is just half of the battle when trying to verify ownership this way. The other downside is the rampant fraudulent behavior, such as connecting to a bank account that differs from the one listed on the application. To fight fraud, aggregators are introducing options to obtain additional attributes such as the full routing number, account number, owner’s name and address.
Now that we have discussed the various methods to verifying bank account ownership and their disadvantages, it is time to look at the benefits of using a non-credentialed automated process, such as ValidiFI’s Bank Account Ownership Validation (BAOV).
- Rapidly assess the ownership of a bank account in a frictionless process. ValidiFI’s proprietary technology does not require online banking credentials, statements, or phone calls. The only information needed is basic personally identifiable information (PII), typically obtained on the first page of financial applications.
- Remove the manual process altogether. Incorporating the BAV service reduces the many manual processes of verifying ownership. This also confidently mitigates administrative concerns with customer supplied data.
- Approve customers all day. This service is available to use via the ValidiFI web console or via API 24/7. This enables financial service providers the ability to approve at all hours of the day.
- Reduce fraud. BAOV evaluates and links hundreds of data points to determine whether a consumer owns the bank account information they present. This removes the burden on the customer but also reduces reliance on data that can potentially be forged or altered.
In addition to providing faster, easier, frictionless verifications, ValidiFI’s Bank Account Validation (BAV) suite of services compliments the Ownership confidence score with add-on attributes, including risk scores, funds verification and balance verification. To learn more on the benefits, visit the Bank Account Validation Ownership page. If you you would like additional information, call 754-209-2511 or email us today.
