If you’re looking for a tool for instant bank account verification, you may still be using:

• Manual verification methods involving physical bank statements, which can be clunky and can take days to verify.
• Account validation processes such as microdeposits (the ‘penny test). While they may cut out the physical paperwork, they’re still time-consuming and expensive—and they suffer from high rates of abandonment.

If you’re frustrated with your current method for customer authentication, instant bank account verification may be the solution for you. As its name suggests, it’s a way to verify your customers in seconds—to help you improve your customer experience, reduce time spent on Know Your Customer (KYC) and AML checks, and better combat fraud.

In this article, we share how open banking enables instant account verification.

We cover:

• What is instant bank account verification?
• How does open banking simplify bank account verification?
• Why instant account verification requires a reliable AISP
• Why use Yapily for your instant bank account verification?
• How two finance brands use Yapily for instant account verification

Prefer to speak to an expert about your customer validation needs? Get in touch.

What is instant bank account verification?

Bank account verification allows you to check two crucial aspects of a customer’s account details:

• Their validity, or whether the account is real.
• Their ownership, whether the account actually belongs to the person claiming it.

Verification is essential for banks and other financial institutions to tackle fraud and ensure that payments go to the intended recipients.

But many banks still rely on outdated methods to verify customer accounts. One example is microdeposits, where a small sum is sent to the customer’s account to confirm they can receive and access it.

This process has significant downsides, as deposits can take up to three days to process and come at a cost to the bank. Plus, customers must wait to use the service they’re signing up for, which doesn’t create a particularly smooth customer experience.

Instant bank account verification, sometimes known as instant account verification (IAV) or instant bank verification (IBV), was developed to solve these problems. It’s a process that confirms the validity and ownership of an account in seconds.

One way bank accounts can be instantly verified is by using credit bureaus. Yet with a cost to every credit search you run—and a common customer reluctance to have their credit file searched at all—this method has its downsides, too.

The more effective alternative is to perform account verification via open banking. Open banking is the financial framework that allows authorised third parties to access consumers’ financial data directly via their banks (with the end-user’s permission). As such, it allows for truly instant account verification.

How does open banking simplify bank account verification?

Open banking enables bank account verification through APIs, which allow for frictionless and secure data sharing. Every bank has its own API, allowing third parties to access the specific data that the institution holds.

Open banking solutions allow third parties—whether other banks, fintechs, lenders, or other financial institutions—to request and receive data from their customer’s bank accounts in real-time.

Through a bank’s API, they can access all the information they need to verify the validity and ownership of an account, such as the account holder’s name, bank account number, bank name, and the balance or any recent transactions.

In practice, what does this look like?

Let’s take the example of a KYC check. Say you’re a financial services business, and you want to onboard a client onto your platform.

With open banking:

• Your client opens your payment platform, enters some basic details, and selects their bank from a list.
• They’ll be instantly redirected to their bank’s portal, where they can give consent for open banking.
• Then, open banking does the verification in the background by confirming your client’s details over the API.

Alternatively, say that a consumer wants to open a new credit card with you. They can simply enter their address, select their bank from your banking app, and then provide consent for you to use open banking to view this information.

This way, you can verify their details without the customer having to submit any paperwork, and without you having to contact a credit bureau or deposit a micro-sum in their account. All the verification takes place within the flow of making the payment or opening the new account. It’s truly instant, as well as completely secure.

Why instant account verification requires a reliable AISP

To effectively deploy account verification for all your customers, you need to work with an account information services provider (AISP). This is a party that’s authorised to use open banking to access account data.

We saw above that every bank has its own API. So, if you want to use open banking as a fintech or PSP, you’d theoretically need to create your own API to connect to all of these interfaces yourself. However, doing this can be time-consuming and costly, and it requires expertise that you may not have in-house.

You’d also need to have FCA authorisation (and/or European equivalent) to operate as an AISP: which can be resource-heavy to obtain.

AISPs help you overcome this problem by providing you with the open banking infrastructure that lets you connect with all the different bank APIs you need. You can use the single API to access all the relevant data for smooth and instant bank account verification.

That said, if you’ve done any research into open banking APIs or platforms that offer account verification—you might be forgiven for thinking they’re all the same. In reality, that’s far from the case. Rather, the kind of experience you and your customers get will depend on the quality of the platform and open banking API you choose.

For instance, some open banking APIs can slow down under high volumes of requests. This inevitably means that your account verification may not be as instant as it should be. Similarly, they may not be able to provide all the data you need for a deep understanding of your customer, such as historic transaction data.

Another critical consideration is that some open banking platforms simply can’t connect you with all the banks you may need. In addition to limiting who you can offer open banking to in your current customer base, poor coverage also makes scaling difficult. For example, if you wanted to expand into Europe, you might need to find a new open banking partner for your European operations.

Yapily is an open banking infrastructure provider that has a reliable and enterprise-ready API and wide coverage, as well as a flexible user experience. In the rest of this article, we want to show you why you should consider choosing Yapily for your instant bank account verification.

Why use Yapily for your instant bank account verification?

At Yapily, we can make it easier for you to verify customer bank accounts, streamlining onboarding and improving the customer experience.

Our product Yapily Validate is designed to frictionlessly verify your customers through open banking. We’ll connect you to customers’ bank accounts and provide you with real-time access to accurate financial data such as account ownership, to verify your customer details.

Here are three reasons why you should choose Yapily for instant account verification.

1. Reliably connect with your customers’ banks across the UK and Europe

One of the biggest factors that impact the quality of an open banking solution is coverage. This refers to the number or proportion of different banks that an API connects to.

If you use a platform without sufficient coverage you can end up having to use multiple sources of data for account verification. And this can slow down your internal processes and affect your customer experience.

Yapily connects with nearly 2,000 banks across Europe, to provide reliable and extensive coverage across the continent. We operate in 19 European countries, including the Netherlands, Germany, France, and the UK.

When comparing different open banking solutions, though, you shouldn’t rely simply on the brute number of bank account connections they boast.

For instance, an open banking AISP might have mostbank connections in a single country that you might not even operate in. It’s much more useful to consider the proportion of bank connections each platform has in each country.

At Yapily, we aim for at least broad coverage in all the markets we enter. This means that you don’t need to use multiple platforms to access the data you require and you can serve as many customers as possible.

Plus, we’re the only platform with tested and fixed business account connectivity, so we can help you to support your customers, regardless of the account they use.

And Yapily supports multiple authorisation flows, to help you integrate seamlessly with any bank or financial institution without additional technical support.

*Note: Coverage does not guarantee service, as it depends on various factors such as local infrastructure. *

2. Quickly implement instant verification with our robust API infrastructure and dedicated enterprise support

As we pointed out above, many open banking APIs don’t always perform as well as they should under high volumes of requests. This can slow down your verification process and affect your customer experience.

That’s why we built Yapily’s API with the needs of enterprises in mind. We rigorously test our API so that it’s able to manage large transaction volumes with minimal downtime. This way, we can ensure that instant verification remains instant for you and your end users.

Unlike other open banking solutions, our focus has always been on providing the API infrastructure. We don’t build applications at the product layer, preferring instead to focus on building the technology on which you can develop your own products.

Throughout, we also provide dedicated support for the needs of enterprises. We’ll help you get authorised and set up in the markets you want to enter, and we’ll ensure you have all the resources you need. Plus, as we’re focused on enterprises, we keep a smaller client list to ensure we can fulfill the needs of our customers.

3. Get full control over your customer verification experience with our white-label and hosted solutions

Account verification is a critical moment in the customer’s experience of your product. Customers will be providing sensitive information, such as their bank account details, and they’ll want to do this in an environment that they can trust. Otherwise, they may abandon the process entirely.

This is precisely why Yapily Validate gives you the opportunity to take full control over your customers’ experience of account verification. With our white-label account verification solutions, you can maintain consistent branding over your entire payment flow. You can build and host the user-facing screens, which you can embed in any application.

White-label solutions can improve your customer experience and reduce drop-offs. However, if you want to get started while we help build your custom page, we also offer hosted pages too. We can build the user-facing pages so you don’t have to—to help you get to market more quickly.

How two finance brands use Yapily for instant account verification

Many PSPs, fintechs, and banks use Yapily Validate for instant customer validation. Here are two examples:

1. InbestMe

InbestMe, a Spanish wealth management platform, has been at the forefront of the robo-advisor market, offering sustainable indexed management to help customers grow their wealth in a socially responsible way.

To streamline and secure its processes, inbestMe integrates Yapily Validate for fast and secure verification of customer bank account information and personal identity. This enables them to minimise fraud and save time previously spent on manual verification.

In addition, inbestMe leverages Yapily Payments to offer a seamless investment top-up experience through our payment initiation service. This has resulted in a 25% increase in conversion rates, as customers can now quickly and easily top up their investment accounts without the hassle of remembering card details or dealing with delays.

Want to know more?* Read the full case study: How inbestMe + Yapily are democratising investment***

2. Crezco

Another company that uses Yapily for account verification is Crezco, a platform that allows SMEs to quickly pay invoices online. The fintech offers a complete payment solution, collecting recurring payments, automating reconciliation, and integrating accounting software with cash flow management.

When managing a payments platform, though, fraud risks are always a concern. That’s why Crezco turned to Yapily Validate, to instantly and securely confirm customer account details in order to increase customer confidence.

With Yapily Validate, Crezco can confirm the validity and ownership of customer accounts instantly, to speed up onboarding. Thanks to open banking, verification is entirely automated, meaning customers can avoid filling out paperwork and submitting bank statements.

As a result, Crezco has significantly improved its customer experience. The brand has reached +76 out of 100 on the Net Promoter Score (NPS) scale, a metric businesses use to measure customer satisfaction.

Read the full case study: How Crezco + Yapily optimise payments for 5,000+ businesses

Instantly verify your customers with Yapily Validate

In this guide, we’ve shared the key details of how open banking can enable instant bank account verification. Unlike other forms of account verification, open banking is frictionless and instant for both you and your end users.

All you need is an AISP like Yapily. Contact us to discover how Yapily can work for you.