Project Description

Business woman in office looking at computer screen

Letting customers in, and keeping criminals out
Bank account validation is a frontline defense

Trust is foundational to customer relationships, and security is table stakes. Alongside security, speed and simplicity are important aspects of the customer experience.

Every year more companies fall victim to fraud with mounting financial losses. As technology evolves, so does payments fraud, with 82% of organizations reporting payment fraud incidents in 2018.1 Organizations must be vigilant to protect their customers and their business assets. At the same time, companies want advanced authentication and security measures that minimize slowing down the digital customer experience.

It’s a delicate balance. Bank account validation can be a valuable tool in the fight against fraud. The solution can detect potential fraud in real-time without slowing down customer interactions. This can help businesses to minimize both fraud attempts and friction, saving companies time and money while enabling a positive customer experience.

Trust through verification in real-time

Digital payments are dependent on speed, and in order for companies to issue payments faster, users, accounts and transactions need to be authenticated and validated quickly. Businesses can send an API request for risk information as soon as a customer enters bank account information into the company’s Web portal or provides account details to a call center. Risk information is returned to the company via an API allowing Bank account validation to happen in real-time. This allows businesses to make the payment-decision process invisible to customers while verifying account information before proceeding with a transaction.

Early Warning Services®2 is a consortium of more than 2,600 financial institutions that contribute account information to a database that member banks can use validate accounts. Financial institutions have been using this database for about 25 years to mitigate fraud risk and expedite payments and disbursement by checking to see if an account is open and currently in good status.

Wells Fargo’s Account Validation services extends this capability to businesses, enabling them to make real-time verification decisions prior to authorizing payments, thus helping them assess and mitigate fraud risk. With Account Validation services, you can boost payment accuracy and reduce the cost of returns by accessing status and ownership information from nearly 600 million accounts.

Is this tool right for your business?

The two Account Validation services available are: 1) account status, and 2) account status plus ownership:

  • Account status. Confirms that a deposit account is open and valid, and assesses the risk of items being returned.
  • Account status and ownership. Allows you determine if your client is a designated signatory with authorization to transact on an account. This service is available for those banks that contribute account ownership information.

Companies can query electronically from within their own systems for an ACH, check, or wire transaction on domestic checking and savings deposit accounts. This service typically makes sense for organizations with a high volume of transactions such as:

  • Utilities, phone providers or other retailers and service entities can enroll new customers for services billed monthly, update bank account information for current customers, and send electronic refunds and overages quickly and seamlessly.
  • Insurance companies can collect monthly premiums, send claims payouts, and issue annuity or life insurance payments.
  • Government entities can issue tax refunds, collect taxes or license and permit fees.
  • Title companies that send a high volume of wire transfers.

A valuable tool in the fight against fraud

Your organization remains the first line of defense against fraud attacks. If security is table stakes, then your organization must build a strong table as foundation for fraud protection. The legs of this table include:

  • Authenticating payment requests
  • Educating executives and staff about the threat of fraud
  • Instructing staff to question unusual payment or account requests received by email
  • Providing awareness to vendors and trading partners on the threat of fraud and the process for communicating about financial transactions and information.

Account Validation services can be one tool in a multifaceted strategy. It offers a frontline defense to help detect when criminals are using stolen account information to steal funds.

For more information, contact your Wells Fargo treasury management representative.

1. 2019 AFP Payments Fraud and Control Survey
2. The Early Warning Services name, logo and related trademarks and service mark is owned by Early Warning Services, LLC and is registered or used in the U.S. and many foreign countries.