How to unlock the value of bank data validation

Whether you are accepting direct debit payments from your customers, or paying suppliers with direct credit, checking the accuracy of bank details at the point you collect them is always important. This is known as Bank Data Validation. 


The ramifications of incorrect bank data are far-reaching. Challenges such as manual handling and fraudulent activities often create data inaccuracies. The fallout can include customer dissatisfaction, operational hiccups and, most detrimentally, the misfortune of failed payments. All of these can result in long term problems for a business. 


With bank data validation, businesses can avoid failed payments, remove the hassle of correcting errors and save a lot of money in the long run. 



How does bank data validation work?


Used at the point of collecting bank details, bank data validation checks account detail accuracy against live banking data, catching incorrect account details before they derail your submissions. It enables processors to catch bank detail errors sooner, highlighting any invalid fields, controlling the quality of payment data at source. 



What are the common types of errors that can occur during bank data validation?


  • Incorrect data: When the customer provides incorrect or outdated information or if the bank’s records contain errors. 
  • Missing data: If the customer fails to provide all required information or if the bank’s records are incomplete. 
  • Inconsistent data: When different sources provide conflicting information about the same account or customer.   
  • Data entry errors: when the person entering the data makes a mistake, such as misspelling names. 



Why is bank validation so important?


The seamless integration of bank data validation into existing systems, accompanied by the prompt return on investment it yields, positions it as a pivotal tool. It not only aligns payment systems with customer expectations but also helps businesses in 6 key ways:


  1. Avoid payment delays: Validating data eliminates rejected payments and prevents failed or delayed submissions with processes becoming more efficient.
  2. Reduce investigation and repair costs: With significantly improved accuracy, error-related costs and hassle is eliminated.
  3. Improve customer satisfaction: With fewer errors, failed payments and time efficiencies, customers are more satisfied with the service they receive, resulting in better reputations.
  4. Ensure compliance: Helps businesses meet regulations that require them to maintain accurate and complete records of customer data.
  5. Prevent fraud: Helps identify fraudulent transactions or attempts to use false or stolen bank account information
  6. Improve operational efficiency: Ensures banking operations can be carried out error-free, efficiently and effectively.


Fundamentally, bank validation forms the bedrock upon which the stability, security, and trustworthiness of payment processes rest. 



Best practices for ensuring the accuracy and completeness of bank data


Reliable bank information is essential for seamless transactions. Various practices can be employed by organisations to safeguard bank data and ensure the stability and success of financial systems.


For best practice, businesses should use a validation tool. Data validation software checks for errors and inconsistencies in customer data, identifying and correct errors, reducing the risk of data quality issues.


On top of this, it’s important to carry out data audits. Regular data audits can help identify and correct errors in customer data. Businesses should also verify data with customers. This ensures your records are accurate and complete.


Finally, but maybe most importantly, businesses should train staff on data management. All staff members who handle customer data should receive training on data management best practices.


By adhering to these best practices, organisations can significantly enhance the accuracy and completeness of their bank data, reducing errors, mitigating risks and ensuring the smooth operation of financial processes.





Easy to implement and delivering fast return on investment, bank data validation can improve not only business processes but customer experience. With so many benefits, bank data validation is an essential tool for achieving error free payments. 


To find out how paygate can help your business achieve error free payment processes, visit our dedicated page.


Need to review your payment processes? We’re here to help.

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