Reducing Fraud and Friction: Using Open Banking to Verify Beneficiary and Legal Entity Details

Whether it’s for payouts to customers or suppliers, pay-ins from users, or verifying business details during onboarding, the risk of payment fraud and fake legal entities continues to grow. This is especially true for industries operating at the edge of financial services — think crypto platforms, gaming, online brokerages, marketplaces, and eCommerce.

At the same time, traditional methods for validating ownership of a bank account remain slow, manual, and prone to error.

That’s where open banking comes in.

By leveraging open banking APIs, platforms can now cross-check the account name and legal entity behind a bank account in real time. This enables them to:

• Instantly confirm whether a bank account belongs to the expected recipient before sending funds.
• Detect mismatches that could signal fraud or impersonation.
• Simplify onboarding flows by verifying the bank account against the business registration.
• Reduce chargebacks, rejected payouts, and manual investigations.

This is more than just a compliance or operational efficiency play — it’s a frontline defence against financial crime.

Take the example of Adyen, a global financial technology platform trusted by leading enterprises like Spotify, Microsoft, and eBay. Known for its unified payments infrastructure, Adyen recently partnered with Fiskil to launch real-time beneficiary name checks using open banking. But the opportunity stretches far beyond just payments. This integration helps safeguard merchant payouts and proactively reduce fraud by validating account ownership before disbursing funds.

Imagine:

• A crypto exchange ensuring user withdrawals only go to verified personal or business accounts.
• A sports betting platform verifying user bank accounts during KYC checks to stop mule activity.
• An eCommerce marketplace verifying sellers’ bank accounts against their registered business before the first sale.
• A property rental platform confirming landlord bank details before disbursing rental proceeds.

As fraudsters get smarter, so must the tools we use to protect value.

Open banking isn’t just about access — it’s about trust.

And trust is the foundation of any financial relationship.

Let’s talk if you’re exploring how to embed open banking verification into your onboarding or payment processes.