G2 Web Services, a provider of risk intelligence solutions for financial institutions, has launched an API that helps banks evaluate the risk associated with merchants and originators of Automated Clearing House (ACH) transfers.
According to Ed Barton, G2 Web Services' President, "The G2 Compass Score API will assist banks in scoring merchants and ACH originators in real time, and making faster, more informed boarding decisions.” Those decisions include one of the most important a bank can make: deciding whether or not to do business with a company. In addition, banks can use the G2 Compass Score API as part of ongoing monitoring of their customer portfolios.
To calculate its G2 Compass Score, which predicts both the risk associated with a merchant and the merchant's profitability to a bank, G2 Web Services analyzes more than a decade's worth of "proprietary business risk history data gathered from monitoring and analyzing the risk of millions of global merchants and billions of data points." Those data points include past violations of bank and credit card network policies, as well as past account terminations with other financial institutions. G2 Web Services says that score is capable of analyzing both established merchants as well as "thin file" merchants for which data is often more limited.
The G2 Compass Score API is part of G2 Web Service's due diligence and monitoring solution, KYC Governor, which was developed to help banks comply with the know your customer rules banks are required to adhere to.
Managing compliance, improving customer experience
The financial services industry is one of the most tightly regulated and vulnerable to fraud. So it's no surprise that there are a growing number of APIs designed to assist companies in this industry with compliance and risk management. For many companies, such APIs are incredibly appealing, as the costs of building compliance and risk management solutions in house would be cost-prohibitive. Additionally, with regulation and threats rapidly evolving, keeping up would be incredibly difficult.
But APIs like the G2 Compass Score API also help financial institutions improve customer experience. Being able to determine a prospective customer's risk in real-time can enable banks to approve new accounts rapidly. In today's increasingly competitive financial services market, where consumers and business owners have become accustomed to being able to open accounts and complete transactions with just a few clicks, the ability to perform complex analyses and make important decisions behind the scenes in real-time can be the difference between success and failure.