1. What’s the difference between credentialed and non-credentialed?
Credentialed Verification: A credentialed log-in process requires consumers to provide their internet banking credentials (username and password). This method provides a plethora of information including the current balance, transaction information, verification of ownership, income verification, and more.
Non-Credentialed Verification: The other way to obtain bank account verification data is through a non-credentialed method. For this method, consumers do not need to provide their online banking credentials. This method provides information including the current balance, verification of ownership, and more. The benefit of not requiring a consumer to provide their internet credentials is that there is zero friction added to your application process.
2. What type of data do you need? Funds availability, name listed on the account, routing and account number, status, or the characteristics and reputation of the account?
Funds/Balance Verification provides insight into the availability of funds in the borrower’s bank account. This data can be used to determine if the borrower has enough funds to clear an ACH payment, or to obtain the current balance.
Bank Account Status Verification provides insight into the overall risk level of the account and whether or not a payment will successfully clear. Status can also provide characteristics and reputational data, which is potentially an indication that there are multiple negative transactions associated to the account.
Bank Account Ownership Verification helps you determine if the applicant owns the bank account that they have provided on the application. Credentialed solutions can provide the full name, routing, and account number associated to bank that is connected. A non-credentialed solution will provide a score giving insight into the likelihood that the bank account provided is owned by the applicant.
3. What is the coverage of financial institutions?
The biggest downside to a non-credentialed solution is some of the data sources available may provide less coverage than others and the credentialed solutions. The average coverage for a non-credentialed solution is roughly 60%, whereas a credentialed solution provides 90%+ coverage. When determining coverage, it is important to not only understand how many financial institutions are covered, but what the coverage is of your consumer base. For example, if 30% of your customers have an account with a bank, it is crucial that you find a solution that has coverage with that bank.