Why online bank references are a must for B2B credit managers

While it seems everything in life has gone digital, a surprising number of events in the financial services industry are still languishing in the analogue age.  

One of these is business to business (B2B) credit checking, specifically getting a bank reference. 

A bank reference is crucial to the credit process - the bank confirms financial data that speaks to a customer's ability to meet a specific financial commitment. The information confirmed can include account types, relative balances, opening date, number of days overdrawn, and more. 

Until now, this process has relied almost exclusively on manual procedures. This makes it time-consuming and unorganized for both the credit manager and the responding bank, resulting in many bank reference requests going unanswered. Plus, the transfer of data via fax, email, or mail isn't secure.   

But Confirmation, the global leader in online financial verifications, is changing that completely. By digitizing the bank reference process from start to finish, it ensures credit managers get the quick and accurate responses they need. 

A flawed process taking days has been replaced by a flawless one taking a matter of hours.  

So how does this all work? Let’s take a look. 

Suppose a gym is opening a new location and needs to purchase treadmills, weight machines, and other workout gear. The gym owner might want to approach a company like Precor about the supply of this equipment, and it might also want a line of credit. 

At this point, Precor, through its credit manager, should conduct a credit check before it can make an informed decision on what, if anything, the line of credit should be. This means approaching the gym company's bank to find out account details through a bank reference request.  

It may want to know, for example, how many different accounts the gym holds, the relevant balances, how balances have fluctuated, when these accounts were opened and how often, if ever, they have been overdrawn. 

Sounds important, right? It is. 

The old, manual way of getting this kind of vital data is painfully slow. It often involves phone calls or (believe it or not) sending faxes to the bank. Replies take a long time to arrive and sometimes don't arrive at all.   

Perhaps worse, if the requested information does get back to the credit manager, it might not be complete or accurate. All those employee hours spent sitting by the fax machine have been wasted. 

In fact, this whole bank reference procedure has been so inadequate and frustrating that credit managers frequently bypass it completely and seek alternative means of finding information without confirming it with the bank. 

But this approach is risky. What if the company doesn't have as much cash in the bank as it says … and then can't pay back what it owes you. You should have all the information you need to make an informed decision.  

This is where Confirmation, comes in. It provides credit managers with a fast and accurate online bank reference process and guarantees a response, usually in a matter of hours.  

Confirmation is already used by more than 4,200 credit managers and is home to a network of more than 1,000 banks, including 50 of the top 100 banks in the USA. So far, some 90 percent of those customers have reported increased confidence in responses to bank references.  

Confirmation's security safeguards exceed industry standards. It also keeps customer data safer than it would be if it were faxed, emailed, or given over the phone.  

Bring bank references back into your process with Confirmation today. 

Simon Boughey is a British financial writer and editor now based in the USA. He began writing about financial markets in London at the beginning of the 1990s for Thomson Reuters and spent most of the ensuing decade in New York covering derivatives. He now writes about a variety of topics, including debt markets, risk management, and crypto currencies as well as editing research papers.