Overview

Bank account opening represents one of the simplest business verification workflows. The primary focus is on regulatory compliance and fraud prevention rather than creditworthiness evaluation.

Key characteristics of bank account opening:

No credit risk: There is no credit risk associated with deposits, leading to higher approval rates
Regulatory focus: Compliance with BSA/AML requirements and industry restrictions
Prohibited industries: Certain sectors cannot be banked (cannabis, high-risk activities)
Simplified verification: Streamlined process compared to lending workflows
Fraud prevention: Detecting synthetic businesses and identity fraud

This guide provides a standard verification workflow optimized for bank account opening teams seeking to balance compliance requirements with fast, frictionless onboarding.

Verification Workflow Overview

A typical bank account opening verification flow includes five key steps:

Fraud Screening: Detect synthetic businesses and fraud patterns (Baselayer + Partner/s)
Industry Screening: Verify business operates in acceptable industry (Baselayer)
AML/KYC: Verify business owner identity and sanctions screening (Partner/s)
Business Verification: Validate business identity and registration (Baselayer)
Identity Verification: Final identity check on business owner (Partner/s)

Each step uses a combination of Baselayer endpoints and third-party verification tools to ensure regulatory compliance while maintaining a fast approval process.

Step 1: Fraud Screening

Purpose: Identify synthetic businesses, fake entities, and known fraud patterns.

Required Tools

Fraud screening provider (for device/identity signals and digital intelligence)
Baselayer: Fraud consortium

Baselayer Endpoints

POST /searches

Note: Baselayer is developing a standalone fraud check product launching in Q1 2026 that will streamline this step. The current approach uses the business search endpoint.

Verification Logic

// Submit business search
response = POST /searches with business details

// Check fraud consortium
IF COUNT(response.fraud_consortium_hits) > 0:
    flag = "RED"
    reason = "Business or individual in Baselayer Fraud Consortium"

// Combine with third-party fraud screening
IF fraud_screening_provider.risk_score > threshold:
    flag = "RED"
    reason = "Failed fraud screening"

Note: Baselayer fraud consortium is only available for member entities who contribute regularly to the fraud database.

Context

Fraud screening for bank account opening focuses on detecting synthetic businesses and known fraudsters. Unlike lending workflows, application velocity and identity network checks are not typically used since banks don't compete for deposits - multiple bank accounts across institutions is normal business behavior, not a red flag.

Step 2: Industry Screening

Purpose: Verify the business operates in an industry the bank is permitted to serve.

Required Tools

Baselayer: Industry prediction

Baselayer Endpoints

POST /web_presence_requests

Tip: The web presence request has 20-30 second latency. Consider initiating this request early in your workflow (e.g., during Step 1) to improve applicant experience.

Verification Logic

// Extract industry prediction from /web_presence_requests response
industry = response.industry_prediction

// Check for prohibited industries
IF industry.keywords CONTAINS ANY prohibited_keyword:
    flag = "RED"
    reason = "Prohibited industry keyword detected"

// Check prohibited NAICS codes with confidence threshold
IF industry.code IN prohibited_naics_list:
    IF industry.accuracy >= 0.75:
        flag = "RED"
        reason = "Prohibited industry with high confidence"
    ELSE:
        flag = "YELLOW"
        reason = "Potential prohibited industry, needs review"

Note: Prohibited keyword and NAICS code lists are proprietary and available to Baselayer customers upon request. Common prohibited industries for banks include cannabis, weapons, adult entertainment, cryptocurrency (varies by institution), and money services businesses. Contact your account representative for access.

Context

Industry screening is critical for bank account opening because banks are prohibited from serving certain industries due to regulatory restrictions or institutional risk policies. Unlike lending where industry affects credit risk, in banking it's a binary compliance decision - the business is either permitted or not. Cannabis-related businesses, for example, are prohibited by most banks despite state-level legalization due to federal banking regulations.

Step 3: AML/KYC

Purpose: Verify the identity of the business owner and screen for sanctions, PEP flags, and adverse media.

Required Tools

KYC provider (for identity verification and AML screening)

Context

AML/KYC is a critical regulatory requirement for bank account opening under the Bank Secrecy Act (BSA) and Customer Due Diligence (CDD) Rule. Banks must verify the identity of beneficial owners and screen for:

OFAC sanctions lists
Politically Exposed Persons (PEP)
Adverse media and negative news
Money laundering risk indicators

This step ensures compliance with federal anti-money laundering regulations and helps banks avoid facilitating illicit financial activity.

Baselayer works with hundreds of partners and can recommend ideal providers for every product and case.

Step 4: Business Verification

Purpose: Validate business identity, registration status, and compliance.

Required Tools

Baselayer: Business search

Baselayer Endpoints

POST /searches

Tip: You can re-use the API response from the POST /searches request from Step 1 and avoid extra charges.

Verification Logic

This workflow assumes only registered businesses are approved. If sole proprietorships are also eligible for account opening, we recommend setting up a separate route as explained in our Sole Prop Verification guide.

// Extract match signals from /searches response
business_id = response.business.id
name_match = response.business_name_match
address_match = response.business_address_match  
tin_matched = response.tin_matched
registrations = response.business.registrations
watchlist_hits = response.watchlist_hits

// Check Baselayer match

IF business_id == NULL:
    flag = "RED"
    reason = "No business match" // skip all other steps

// Check name and address matching
name_address_approved = FALSE

IF name_match == "EXACT" AND address_match IN ["EXACT", "CITY", "STATE"]:
    name_address_approved = TRUE
    
ELSE IF name_match == "SIMILAR" AND address_match == "EXACT":
    name_address_approved = TRUE

IF NOT name_address_approved:
    flag = "RED"
    reason = "Weak name/address match"

// Verify TIN
IF tin_matched == NULL:
    # IRS outage - handle per policy
    # See [IRS Outage Handling Guide](#) for detailed guidance
    flag = "YELLOW"
    reason = "TIN verification unavailable (IRS outage)"
    
ELSE IF tin_matched == FALSE:
    flag = "RED"
    reason = "TIN does not match business name"

// Check registrations
domestic_active = FALSE
FOR EACH registration IN registrations:
    IF registration.type == "domestic" AND registration.status == "active":
        domestic_active = TRUE
        domestic_state = registration.state

IF NOT domestic_active:
    flag = "RED"
    reason = "No active domestic registration"

// If business operates in different state, verify foreign registration
// Operating state is usually the one from the application address
IF operating_state != domestic_state:
    foreign_active = FALSE
    FOR EACH registration IN registrations:
        IF registration.type == "foreign" AND registration.state == operating_state AND registration.status == "active":
            foreign_active = TRUE
    
    IF NOT foreign_active:
        flag = "YELLOW"
        reason = "No active foreign registration in operating state"

// Check watchlists
IF COUNT(watchlist_hits) > 0:
    flag = "RED"
    reason = "Positive sanctions or watchlist match"

Context

Business verification for bank account opening ensures the entity is legitimate, properly registered, and not on sanctions lists. Unlike lending, banks typically don't require minimum business age or extensive financial documentation - a newly incorporated business can open an account immediately. The focus is on confirming the business exists and is legally established.

Step 5: Identity Verification

Purpose: Perform final identity verification on the business owner opening the account.

Required Tools

Identity verification provider (for enhanced identity checks)

Context

The final identity verification step confirms the individual opening the account is authorized to do so and matches the information provided in earlier KYC checks. This typically includes:

Government ID verification
Liveness detection
Identity document authentication

This step provides an additional layer of fraud prevention and ensures the person opening the account is the legitimate business owner or authorized representative.

Baselayer works with hundreds of partners and can recommend ideal providers for every product and case.

Implementation Checklist

Use this checklist to implement the bank account opening verification workflow:

Setup

Integrate fraud screening provider
Integrate Baselayer API
Integrate KYC provider
Integrate identity verification provider
Request prohibited industry lists from Baselayer representative

Step 1: Fraud Screening

Implement POST /searches endpoint
Configure fraud consortium check (if member)
Integrate third-party fraud screening

Step 2: Industry

Implement POST /web_presence_requests endpoint
Configure industry screening for prohibited industries

Step 3: AML/KYC

Implement KYC/AML verification
Configure sanctions and PEP screening

Step 4: Business Verification

Implement standard KYB verification logic
Set up sole proprietor routing (if applicable)

Step 5: Identity Verification

Implement identity verification check
Configure manual review queues
Set up rejection workflows

For questions about implementation or to request prohibited industry lists, contact your Baselayer account representative.