Credit Decision Engine - Bank Account Originations Software

Decision Engine is the central nerve system of any bank account origination process. Whether you are a bank, credit union or fintech focuses on bank account origination, you must have a robust credit decision engine that helps you make real time and accurate decisions

Credit Decision Engine - Bank Account KYC Process

One of the critical elements of the bank account opening process is KYC or (Know Your Customer). KYC is a a process where the bank must verify the identity of the person applying for a bank account.

After the 9/11 terrorist attack, the United State’s government passed the patriot act which makes all banks and financial institutions responsible for validating the account owner's identity and verifying who they say they are.

This puts a tremendous amount of pressure for banks to properly audit their bank account origination process. With the popularity of internet banking and generational demand, people don't want to visit traditional bank branches anymore and they are more aligned with opening a bank account on the web or through a mobile app.

Users of internet banking demand real time decisions and don’t want to wait around for the banking system to render a decision, they want to open their account, make deposits and immediately transact with their newly minted account.

Credit decision engines are now taking on additional tasks of integrating with third party data providers to verify a person’s identity in real time.

In the past 20 years or so, there have been a ton of identity verification vendors available for small business banking, personal banking and credit seeking activities. All of the traditional credit bureaus are offering a credit header based identity verification tool.

Some other identity vendors such as Socure and Sentilink are using additional datasets such as pseudo-PIIs to verify a person’s identity. Datasets such as phone number, email, device ID or IP address are all coming into focus as factors to be used in a credit decision engine to make that critical KYC decision for banks to open a digital bank account.

Credit Decision Engine - Bank Account Workflow Orchestration

Sometimes third party data providers can’t accurately verify a person’s identity. The applicants' identities either belong to younger generations of consumers that haven’t established themselves in various databases or new immigrants seeking banking services.

However, there are more than a handful of scenarios where fraudsters are attempting to gain access to banking systems with false identity or synthetic identity.

These identities that are pieced together by fraudsters will get tripped up by third party identity providers and these applications need to be reviewed or further documentation needs to be provided for additional adjudication. 

Credit decision engines should have a built in workflow system or interact with one closely to triage these situations. For young people and immigrants, perhaps another form of physical ID, say passports or driver license might be sufficient.

For fraudsters that can’t supply this information an out-of-wallet or challenge questions might be the way to deter further attempts to open up a bank account.

However this works, a workflow needs to be interactive both for back office fraud analysts and for the consumer on the other side of the application. A document upload, document examination process all needs to be built in and the resulting decisions need to be fed back into the decision engine to properly communicate back to the applicant and the bank back off staff.

Credit Decision Engine - Bank Core Integration

There are many modern bank cores available now such as Thought Machine, Mambu that are built with a ledger system that communicates with other enterprise systems. Jack Henry, Fiserv, FIS are old guards that have a solid foothold in the ban core software market.

Then there are bank core aggregators that provide uniformed API calls such as PortX that pave the way for other originations systems, decision engines to interact through their API and directly communicate with any bank core systems out there.

This makes it very easy for a Credit Decision Engine to intake application data, run through all KYC requirements or light credit checks and book the newly established bank account through PortX and directly into any core banking software.

This integration is a must for any bank account opening software and its attached decision engine. There are many other bank related functionalities that a bank account software might take on such deposits, money transfers. Some of these activities might require the decision engine system to do a light check before deposits and transfers are made to deflect any account takeover attempts.

Credit Decision Engine - Bank Account Opening Software Demo Site

Nothing’s better than seeing what we’ve been talking about in action. We have prepared a demo site for everyone to enjoy.

In this demo site, we will walk you through a small business banking account origination process. In this demo, we will show you around how to create a small business bank account application through a product builder concept and link all the pages to KYC vendors as well as connecting to a bank core software.

All of what you will see is available at https://bankdemo.lendapi.com/login/. You can click on sign up right below the credential boxes for your very own account.