How and When Should Financial Institutions Verify, Update Account Holder Information?

by Jackie Lile

With 37 million cell phone numbers recycled every year, 11.5% to 12.5% of Americans moving each year, and 7% of Americans making new email address every 6 months, it’s challenging to keep account holders’ information up-to-date. To make this task even harder, they may think it’s a phishing scam, or they may simply not respond to your request. Yet, it’s required for financial institutions to do due to regulatory expectations. With that said, how do you get account holders to update their information and how often should you do it?

One way to encourage account holders to verify or update their information is to send out a letter. Letters will be delivered to every account holder, assuming a valid address is on file, and help build trust with recipients. It’s also recommended to include the following in your letter:

  • Why you’d like for them to verify or update their information.
  • The different ways for them to provide this information to you (call this number, visit their local branch, don’t need to do anything if information is correct, etc.).
  • Why it’s important for them to make sure their information is correct (helps identify unusual spending patterns, prevents money laundering through the Know Your Customer (KYC) program, and helps you better serve them).*

You could also combine this letter with an email or phone call. However, some recipients may be reluctant to provide information this way. This could be because they are not comfortable doing it via email or over the phone, or they may think it’s a phishing scam. To help put them at ease, mention that they can visit a branch to verify or update their information as well.

When it comes to how often you should verify or update an account holder’s information, that will vary slightly across financial institutions. A good practice would be to do this once a year. It may also be a good idea to request this information around the same time each year. That way, account holders will know when to expect it. This will hopefully lead to more account holders verifying or updating their contact information. Thus, providing you with more up-to-date account holder information.

Looking for a template to get started? Check out our letter example.


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