When handling numerous financial transactions daily, ensuring a seamless onboarding process is crucial. One key component of this process is verifying bank account numbers. This step confirms the legitimacy of the bank account details provided by customers or clients, safeguarding against fraud and ensuring accurate financial transactions.
Bank account verification ensures that the individual using your services is the rightful owner of the bank account they are transacting from. Typically, this involves customers providing credible information to prove account ownership, such as a bank statement. Additionally, consumers may verify their identity by supplying data that matches records maintained by a credit bureau or their banking institution.
In this article, we will explore the best practices for businesses operating in Africa, looking to streamline their onboarding processes, with a particular focus on the crucial step of verifying bank account numbers.
What Kinds of Companies Need to Verify Their Customer's Bank Account?
Examples of companies that need to verify their customer's bank account include:
a. E-commerce platforms
E-commerce businesses rely on bank account services to accept payments from customers. They use these services to receive funds from online purchases using credit/debit cards, bank transfers, or digital wallets. Bank account services enable seamless processing of transactions, ensuring timely delivery of goods and services to customers.
b. Subscription-based services
Companies offering subscription-based services, such as streaming platforms or software-as-a-service (SaaS) providers, require bank account services to collect recurring subscription payments. Bank account services automate billing processes, ensuring uninterrupted access to services for subscribers.
c. Banks and Fintechs
Banks and other financial institutions require bank account services for their day-to-day operations. These services enable them to manage customer deposits, process transactions, facilitate wire transfers, and provide other banking services to clients.
d. Online Gaming and Betting companies
Online gaming and betting companies rely on bank account services to manage deposits, withdrawals, and payouts for players. Bank account services facilitate secure transactions, enabling players to deposit funds into their gaming accounts and receive winnings.
e. Cryptocurrency exchanges
Cryptocurrency exchanges require bank account services to facilitate the conversion of fiat currency into cryptocurrencies and vice versa. These services enable users to deposit fiat currency into their exchange accounts to purchase cryptocurrencies and withdraw fiat currency from their accounts to sell cryptocurrencies.
f. Remittance services
Remittance companies provide international money transfer services to individuals and businesses. These companies use bank account services to send and receive funds across borders, enabling customers to transfer money to family members, pay bills, or conduct business transactions globally.
What are the Benefits of Bank Account Verification?
The Bank account verification process possesses several benefits, including:
i. Fraud prevention
Bank Account Verification helps mitigate the risk of fraudulent activities such as identity theft, unauthorised transactions, and money laundering. Verifying the authenticity of bank account details ensures that businesses deal with legitimate customers and reduces the likelihood of financial scams.
ii. Regulatory compliance
Many African countries have stringent regulations in place to combat financial crimes and ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) laws. Bank Account Verification helps businesses adhere to these regulations by verifying the identities of their customers and maintaining accurate records of financial transactions.
iii. Facilitated access to financial services
Bank Account Verification enables businesses to access a wide range of financial services, including banking, payment processing, and lending. Verified bank accounts serve as a gateway to financial inclusion, allowing businesses to participate more fully in the formal economy and access opportunities for growth and expansion.
iv. Streamlined onboarding processes
Efficient Bank Account Verification processes streamline the onboarding of new customers and clients, reducing the time and resources required to verify their identities and bank account details. Simplifying the onboarding process enhances the overall customer experience and facilitates faster account activation and transaction processing.
Best Practices for Streamlining Onboarding Using Bank Account Verification
With the rise of digital banking and online transactions, the need for multiple verification methods has become more pressing than ever. While Bank Account Verification is very pivotal for your business’s verification process, layering it with other forms of verification like Document Verification is the right approach to a secured system.
What is the ideal document verification process?
Document verification involves authenticating a document or documents to ensure that they are accurate, genuine, and fit for their intended purpose. Many officially issued documents, such as a driver's license, ID card, or passport, are used to confirm an individual's identity. The best kind of document verification process goes beyond textual verification and utilises biometric technology like facial recognition.
ID documents without biometric information are most vulnerable to stolen ID attacks. - The 2024 Digital Identity Fraud Report by Smile ID.
Now let’s jump into some best practices for streamlining onboarding with multilayered verification:
1. Automated verification processes
Implement automated verification systems capable of swiftly validating bank account details and documents provided by customers. Integration with financial institutions or third-party verification services through APIs or SDKs streamlines the process while reducing manual intervention.
2. User-friendly interfaces
Design intuitive interfaces for bank account and document verification processes to enhance the customer experience. Ensure accessibility across various devices to minimize friction and encourage completion. Simplified steps and clear guidance enhance user engagement and compliance.
3. Tiered transaction monitoring
Adopt a tiered approach to transaction monitoring instead of collecting all information during the onboarding phase. Gradually escalating verification requirements based on transaction behaviour allows for a smoother onboarding experience without compromising security.
4. OCR technology implementation
Incorporate Optical Character Recognition (OCR) technology to alleviate the burden on users by minimising manual data entry during document the document verification process. OCR streamlines the document verification process, reducing errors and enhancing overall efficiency.
What is OCR: The process of converting images of text to machine-encoded text, used in document verification
5. Transparent communication
Communicate the bank account verification requirements to customers during the onboarding process. Provide comprehensive instructions on completing verification steps and emphasise the significance of this process in fostering trust and transparency. Transparent communication builds confidence in the security measures adopted by your business. Also, make sure you are seeking permission from your users to have access to their sensitive information.
6. Continuous improvement and feedback loop
Establish a feedback mechanism to gather insights from users regarding the verification process. Analysing user feedback allows for iterative improvements, ensuring that the onboarding process remains streamlined and user-friendly.
Accurately Confirm Bank Account Ownership with Smile ID
The need for robust bank account verification solutions has never been more critical as the world keeps getting closer digitally. As outlined in this article, implementing best practices such as automated verification processes and multi-layered verification is essential for safeguarding against fraud and ensuring regulatory compliance
Achieving all of these while maintaining a seamless user experience can be a challenge. This is where Smile ID is a game-changer for businesses seeking a reliable and efficient bank account verification solution.
Smile ID offers unparalleled convenience and accuracy in confirming bank account ownership with seamless integration capabilities across over 20 banks in Nigeria and Zambia.
With Smile ID’s Bank Account Verification Solution, you can:
- Link bank account with digital wallets
- Onboard seamlessly, as your users only require one input to get everything you need
- Confirm accurate banking information
- Combine Bank Account Verification with other verification methods like Document Verification
Smile ID Document Verification Solution covers over 8,500 identity documents across 226 countries worldwide, our OCR technology boasts a remarkable 96% accuracy rate. Optimised for lower-end smartphones, particularly catering to the needs of African users, this method seamlessly combines document verification with liveness facial recognition, delivering results in less than 2 seconds.
We also offer a range of complementary verification solutions, Business Verification, Phone Number Verification and AML checks, to help you with your robust user verification needs.
Contact our team of experts to get started here.
