A lion-tamer of old had a few tools – a whip, a chair and maybe a pistol. Of the three, the most important was the chair. Why? Because a four-legged chair presents the lion with a conundrum. The big cat sees four things before his face. Trying to process four possible targets at once, the lion becomes confused. His singular focus is broken and he hesitates.
AP managers facing the risks of fraud may feel very much like the lion confronted with too many points to focus on. Fraud can hit from many directions. In the current risk environment our divided attention, together with stretched resources and fragmented processes, can lead to disaster.
It was bad enough when fraud was “analog”—a perpetrator had to get their hands on a check or the check stock, or access and manually alter the vendor master file themselves or maybe get away with slipping in a bogus invoice. Those threats remain. “Check fraud remains an ever-present threat, causing financial harm to both people and organizations as these schemes continue to evolve today,” according to the Association of Certified Fraud Examiners. Traditional occupational fraud happens somewhere every day. But now fraud has also gone digital in a big way, multiplying angles of attack, from perpetrators who may be anywhere in the world.
Consequently, verification and validation processes have become more vital than ever. But processes involve friction. Friction is a drag on action, tempting some to “streamline” processes. With multiple fronts of attack, management is more critical even as processes, coordination and communication become harder to manage.
A Bulwark to Meet Multi-faceted Threats
Fraud now involves simple phishing schemes, sophisticated vendor email compromises and deepfake attacks. Cyberfraud is a multi-faceted, rapidly evolving threat that can strike from virtually any angle.
Like a lion faced with multiple threats, AP professionals must grapple with a variety of potential fraud scenarios. The digital world, for all its convenience, has become a prime breeding ground for cyber wolves, and fraudsters are taking full advantage. And combined with the technology is sophisticated social engineering—effective emotional manipulation of victims.
Hence, an indispensable bulwark against payment fraud is vendor bank account verification. The need to verify, authenticate and validate a vendor’s bank account has never been more crucial. However, this necessary verification comes at a cost: added process friction.
The Burden of Manual Bank Account Verification
Bank account verification has traditionally been a time-consuming, manual task. Employees are required to confirm the validity of account details through time-intensive methods like calling vendors and banks, cross-referencing account numbers and verifying documents.
While verification has become imperative to protect the company’s bottom line, the manual process is an impediment. It is tedious, slows down the payment process and bogs down the AP staff, leading to uneven application and completion.
Why Automated Bank Account Verification Is Essential
To keep up with the growing number of digital fraud threats and to mitigate the friction associated with manual processes, companies need to embrace automation in their bank account verification (BAV) processes. An automated solution can quickly and easily validate bank account details against secure, real-time data sources, ensuring that the accounts involved in any transaction are legitimate and active.
Unlike manual verifications, which may take hours or days, automated systems can perform these verifications within seconds. This not only speeds up the process but also ensures that fraudsters are unable to exploit any gaps or weaknesses in the verification chain. Automated solutions are more accurate, with fewer opportunities for human error.
But perhaps the most compelling reason to automate is the consistent performance it offers. Automation removes the variability introduced by burdened AP personnel performing the verification process. With automation, human error, distraction or fatigue no longer result in missed validations or overlooked red flags. The BAV process is consistently executed according to the same high standards—every time, without exception.
Mitigating Risk and Enhancing Security
Fraud, especially when it comes to payments, is costly—not only in terms of direct financial loss but also in terms of reputation and trust. If fraud is allowed to slip through the cracks, the fallout is far-reaching, affecting vendor confidence, regulatory compliance and the company’s reputation. Automated bank account verification is a crucial part of a broader strategy to mitigate risk and improve security.
The Bottom Line
Fraud has become more sophisticated and can be conducted from anywhere in the world. Companies can no longer afford to rely on outdated, manual processes for bank account verification. The cost of skipping or delaying this vital step is too great, and the risks—financial, operational and reputational—are too high. By moving to an automated bank account verification process, businesses can ensure that they consistently and effectively protect their operations from fraud, while also minimizing friction and increasing efficiency.
In the battle against fraud, automation of vendor bank account verification isn’t just a convenience—it’s a necessity.
To learn how VendorInfo’s automated vendor bank account verification can quickly be put to work for you, schedule a meeting.