As we discussed in my last post, the importance of bank account validation cannot be understated when it comes to streamlining payment processes and eliminating failed direct debit transactions.
As was recently noted in the “2018 U.K. Business Payments Barometer,” however, bank account validation is also a high priority when it comes to general payment protection measures.
For the purposes of this survey, more than 400 financial decision makers were questioned across all types and sizes of organizations. When they were asked about what non-IT security measures their bank had implemented to lower the risk of fraud, half of the survey respondents indicated that they’d put both bank account validation and identity verification in place. It’s the third consecutive year that those have been the most common security measures.
Generally I tend to focus on how serious the impact of failed transactions can be to business. Some of the ramifications are immediate and quantifiable and some are more long-term and insidious:
- Seventy-eight percent admit the finance team spends more than 10 minutes rectifying each failed Direct Debit; with 14% taking more than 30 minutes per transaction
- 43% of finance teams spend more than four hours every month fixing problem transactions; and 11% take more than 10 hours each month
- Almost three-quarters (71%) of businesses admit failed Direct Debit transactions damage customer and employee relations; 36% said they result in a higher business cost to secure revenue
But it’s interesting to consider account validation as part of a more comprehensive security plan, especially given the variety of fraud concerns cited in the report, such as the fact that since 2016 there’s been a 169% increase in the concern over fraud committed by internal employees. 60% of respondents also cited concern over external fraud (a 23% increase since 2016), and there’s been a growth in the internal exploitation of systems and controls.
When combined with automated invoice portals, multi-factor authentication and proactive transaction checking, it’s clear that solid bank account validation tools are a key part of any security toolbox, as well as an important part of an organizations overall business payment strategy.
To learn more about the state of business payments in the U.K., view the full “2018 U.K. Business Payments Barometer.”