As of 2022, 78% of adults in the U.S. prefer to bank via a mobile app or website1. With online financial services being a necessity for many, ensuring the security of those services is imperative.  

Consumers seek fintech solutions for a myriad of applications. Whether it’s for account opening, account funding, sending and receiving payments, credit enhancement, etc. – the fundamental step to enabling these services is account ownership validation.  

Establishing and securing the connection between a consumers' financial account(s) and their preferred apps holds significant importance. It is fundamental for fintechs to ensure that the account being linked is, in fact, the consumer’s account, and not an account being taken over through stolen credentials. 

The proliferation of Open Finance has given rise to new, more secure and consumer-centric methods of account ownership validation.  

Traditional methods of account ownership validation 

Existing methods of account ownership validation have traditionally relied on a username and password as the only level of security. Unfortunately, usernames and passwords can be compromised and exploited in order to gain access to third-party services – with the consumer sometimes remaining completely unaware.   

In many cases, account ownership is not validated when linking external accounts to a third-party service. These single-factor authentications put consumers at risk of various fraudulent activities like phishing, vishing, and other hacking methods. 

Fintechs are also searching for ways to ensure that consumers are linking only their personal accounts, as opposed to those of their partners or children, for example. This is particularly important when a fintech’s use case relies on “me-to-me” scenarios, which is when a consumer wants to transfer money from bank account A to bank account B or wants to offer alternative lending options using transaction history data. 

More secure, Open Finance-driven account validation 

Akoya helps fintechs achieve the necessary level of consumer security thanks to the benefits of modern Open Finance technologies. Akoya offers 100% OAuth API-based, permissioned data access to fintechs requiring consumer financial data to power their products and services and retrieves consumer information on file with the linked financial institutions.  

Fintechs can cross-reference the account ownership information provided by the consumer with the information provided by the financial institution through Akoya’s data access network. Data elements such as first name, last name, mailing address, e-mail address, or phone number can be used as part of this process. Akoya also returns data related to the relationship between a list of accounts and the given customer (e.g., primary, secondary joint, trustee, power of attorney).   undefined

 This process is typically done using data elements in a scoring model which allows fintechs to identify and flag potential fraud attempts during KYC-like processes, or periodically when fraud is suspected. 

Once the data matches, fintechs can use the ownership information to confirm that the consumer should indeed be leveraging this account for the services provided. This becomes essential if a fintech offers products like cash flow-based lending and underwrites a consumer using the linked bank account. 

Open Finance use cases  

Thanks to Open Finance and the ability to have permissioned access to these data elements, fintechs can be more confident that the completed validation process is credible and dedicate resources and time to providing the best user experience and services to consumers. 

Validating consumer account ownership is not the only step in the onboarding process. Review ways to improve account linking experiences and account number verification processes in previous posts. 

Contact us to discuss other pain points that Akoya could help solve today.  

  1. According to Forbes’ 2022 survey on digital banking