By Brian Sebak, Auditor at P&G Associates
Throughout my observation and experience auditing different community banks in the northeast, it seems that there are different methodologies with regards to maintenance changes on a customer’s account(s). Some may see the function as quite effortless, but viewing it from the customer’s point of view may change that mindset. When dealing with a customer’s personal information (i.e, Social Security #, address, telephone, and banking information), crucial security measures should be taken to ensure you are dealing with the actual customer and not someone who is attempting to commit ID Theft. Imagine walking into a bank to make a simple check deposit: during the transaction, you ask the teller questions about your account history. Wouldn’t it bother you if they didn’t ask for your ID or any account security questions, and to realize anyone with your account number could do the same?
Thinking about all the different products and services a bank offers to their customers, there can be many different types of maintenance changes made to a specific account. For example, thinking about an address change made on deposit accounts and loan accounts, do you believe they should be handled by different departments? Different procedures? However, in the end you are making the same “address change” to a type of account you have with the Bank. To ensure consistency within the process, all maintenance changes should be streamlined within the Bank regardless of what type of account for which you are requesting a change (i.e., address change, add/remove signer, or Interest rate change.)
If a customer requests an address change, the Bank usually provides the customer with an “address change form” for such request. The customer must fill out the form completely and make sure to sign the form. Once the Bank receives this request form in person, the Bank should perform two verification steps. First, verify the identification of the customer with a driver’s license or (i.e., Passport, 2nd photo ID,) and secondly, verify the “new address” is the confirmed address for the customer. When verifying the actual address, the Bank should be looking for adequate documentation to prove an actual address change occurred. (i.e., sticker on the back of driver’s license, utility bill with new address, or customer’s property tax bill). When completing such request, all identification types should be photocopied and retained with the request form. When processing the maintenance change request, the Bank should also have dual control with these types of requests. Whoever “takes in” the change should sign the form for acknowledgment for verifying the identity of the customer and the accuracy of the new address. Another Bank employee (usually a supervisor or manager) should review the documents and approve the change request by also signing the request form. Once the approval is completed, the request form should be forwarded to the back office for processing the maintenance change.
Banks may receive a request to change an address on a loan account, but why should there be different procedures or different bank personnel involved just because it deals with the loan account? All banks should consider making their process streamline regardless of what type of account the customer is requesting a change. This will mitigate any possible chance for human error or fraudulent changes. Why make something more difficult by involving different people into a process that can be run effectively the same way each time with the same bank employees? Maintenance changes should not be overlooked as an immaterial bank function. Imagine your bank statements going to the wrong address and someone gets a hold of your account number, deposit information, and more! Protecting the customer is a number one priority, so why not go the extra mile to make sure your customers are being taken care of in the most secure efficient way?
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