It’s no secret that businesses must move fast to stay ahead of developing trends. But today’s digital world has both increased the speed and raised the stakes. From unprecedented transactional volume to the behavioral shifts of digital-first customers, companies must rethink the way they do business — and rethink quick.
Bank Account Validation: What is it?
The pandemic has accelerated the transformation to digital purchasing, but it has also attracted the attention of fraudsters. To protect both consumers and businesses, new account validation rules are addressing fraud and providing secure transactions.
Bank account validation also goes beyond fraud. It is an important tool for businesses who originate Automated Clearing House (ACH) credits and debits. Using an incorrect routing and transit number and/or account number for the recipient of an ACH transaction can cost a business both time and money. It can damage a company’s relationship with employees, customers, and vendors; result in fees from a company’s financial institution; delay the start of an employee’s direct deposit of payroll; cause payments to suppliers to fail; and delay in the collection of funds from customers.
Real-time data makes a real difference
Traditional bank data and credit tools have limited insight and a historical perspective only. Accelitas BAV solutions provide real-time account information with unmatched coverage, routinely testing at 98% knowledge of all U.S. bank accounts. Confirming transactional data “in the wild” with daily updates from 400K+ merchants, billers, utilities, and government entities provides deep behavioral insights that can even become a proxy for employment based on continued spending and velocity.
Compliance is now mandatory
A new rule from Nacha, which governs the ACH Network, requires that account verification now be part of antifraud efforts and initiatives. Nacha requires that ACH originators of web debit entries use a “commercially reasonable fraudulent transaction detection system” to screen web debits for fraud. The Nacha Web Debit Rule became mandatory and enforceable in March, 2022. In addition to providing Nacha compliant services, Accelitas is a Nacha Preferred Partner.
Three keys to BAV success
Accelitas has identified three key factors that define the next generation BAV solution, delivering both Nacha compliance and improved customer experience:
- Real-time transactional data sources to provide greater coverage
- Predictive analytics to make smarter real-time decisions
- Customization and close loop monitoring to provide continuous optimization
Next level verification
Accelitas® has enlisted unmatched coverage of U.S. bank accounts, and real-time data updates to provide what traditional verification players can’t — instant bank account validation tuned to a company’s specific business needs.
These frictionless bank account validation solutions allow instant validation of bank accounts without the use of Online Banking (OLB) credentials. The non-credentialed bank account validation service provides a more intelligent and economical alternative, delivering real-time confirmation of active accounts to create a better customer experience, including the elimination of “fat-finger” errors when manually entering routing and account number.
Why is Instant Account Validation important?
Consumer behavior is changing
The next generation of digital-first consumers (Millennials, Gen Z) don’t play by the previous rules. They are harder to reach by traditional methods, and expect a fast and seamless customer experience, or risk abandonment. Reaching this next generation of customers and successfully balancing both security and customer experience will require a new set of tools.
Demand (and fraud) is soaring
Digital transactions will exceed $1 trillion for the first time this year and are expected to reach $4.3 billion a day in 2025. (eMarketer 2021). The increase in transaction volume and real-time payments has also attracted the attention of fraudsters, more than $20 billion in 2021 — an 18% jump from the previous year. (source: Juniper Research 2021). To protect both consumers and businesses, businesses must learn to navigate these new compliance and privacy rules, or risk increased fraud or financial punishment.
Bottom Line? It’s a good time to Validate
While fraud, compliance, and changing behaviors present problems to solve, these fast-moving trends also present a tremendous opportunity. Businesses that are able to apply fast, fair, and frictionless account validation solutions will be able to maximize coverage for hard-to-reach consumers, navigate often complicated privacy and compliance issues, and deliver the positive customer experience that will grow business in the new digital marketplace.
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