The Bank Rating Letter: An Obituary
BANK, RATING, LETTER. Whether you are in sales, operations, or compliance, these are probably your three least favorite words strung together. The Bank Rating Letter, this one-page document widely used by payments companies over the last three decades — it has to go.
The problem with this form — besides being obviously stuck in the 90s — is its awkward relationship with factual accuracy. Let’s be honest here: we must blindly trust that the bank rep knows what they’re doing while filling what is, after all, a niche form within our industry. Manual processes like these are time-consuming, cumbersome and prone to error.
Manual processes like these are time-consuming, cumbersome and prone to error.
When performing KYC due diligence, are you comfortable approving grey area accounts based on second-hand information you can’t confirm is accurate?
Plus the time it takes to get this information slows down your operations and sales teams, and might turn away good customers because of delays. The Bank Rating Letter fails on both counts of questionable data integrity and painful user experience.
We sometimes do what we do for lack of a better option. The typewriter and the fax machine were both useful communication tools that now belong to the past. The old Bank Rating Letter is ready to join them.
Fortunately, bank account connectivity enables you to meet your KYC requirements and simplify your business processes in the digital era.
Nowadays, you can integrate a quick and secure process within your product that allow your customers to authenticate their bank account and validate their identity — in seconds, not days. Plus, you can access your customers’ transaction history to make timely, data-driven decisions.
We all know the payment industry is a volume-based business, and MMR historically has had downward pressure over the years. It has never been more important to ensure data accuracy to keep account profitability at a maximum. By leveraging your customer’s bank accounts as a source of information, you meet your compliance requirements, maximize risk mitigation and minimize operational costs.
Saying goodbye to anything that’s been in our lives for decades isn’t easy. However, when referring to a new more efficient process that makes everyone’s lives easier, out with the old and in with the new!