verification of income and employment

If you’re a lender, landlord, or employer, you know this to be true: it’s crucial to have up-to-date, verified information about applicants. You don’t want to underwrite a mortgage, provide a car loan, or rent an apartment to someone you don’t have needed information on. You want to make sure applicants can do what they’re promising.

We’re talking about verification of income and employment, and it’s what makes many significant transactions or agreements possible. It allows businesses to take wise risks and helps consumers make financial decisions that are right for them. Let’s take a closer look at what employment and income verification services are, how they work, and how businesses can leverage Finicity Lend™ for more streamlined and accurate verification experiences.

What Is Income and Employment Verification?

Income and employment verification—or verification of income and employment (VOIE)—is just what it sounds like: a way to ensure that someone’s stated income and employment are accurate. Employers and lenders typically use VOIE for more significant purchases or agreements. Lenders might use VOIE for preparing a mortgage or other loan, landlords for tenant screening, and employers for background checks.

If, say, a lender completed a VOIE for a potential borrower, what would they see?

  • Whether the applicant actually worked for the employer they listed
  • Income streams and deposit transactions
  • Two years of deposit transactions
  • A historical and estimated average gross monthly income amount

How Does Online Income and Employment Verification Work?

Verifying income and employment can be pretty simple using consumer-permissioned data. For example, at Finicity, here’s how it works:

First, the consumer grants permission for their data to be used either from their financial institution or a payroll provider. They can upload a pay stub, if needed, or other income data.

Second, we digitally extract and verify the income and employment data you need. We’ll analyze the data and add insights to provide a historical view of income and/or employment and confirm the current employer and/or income level by cross verifying employment data with transactions in their bank account.

Finally, we provide a thorough, but easy-to-read report or just the specific data you need.

Other services typically don’t connect directly to banks and use lagging data like database solutions or manual verifications that request information directly from the applicant’s employer or even the IRS, for example. That can take a long time, though (some documents may take months to make it to you), so it’s worth it to go with a service that can automate employment and income verification. It’ll do the heavy lifting for you in minutes, making your life simpler.

The Benefits of Using Finicity’s Open Banking Platform for VOIE

When choosing an online income and employment verification service, you don’t just want a simple process. You also want accurate information and the assurance that the service is keeping your data secure. Finicity’s open banking platform is provides those important benefits, plus some nice perks:

  • It’s quick: It takes us seconds to give you two years of income history with income streams and assigned confidence scores.
  • It’s easy: Instead of manually calling employers, you can get the employment data delivered straight to you, with data access and insights, too.
  • It’s real-time: Real-time, bank-validated data provides an accurate snapshot of a borrower’s current income and employment status.
  • It’s cross-verified and multi-sourced: With data from the bank and the employer, and from multiple accounts, you know the data you’re getting gives the full picture. Finicity’s patent-pending TXVerify™ technology matches key data from pay stubs and bank accounts, ensuring the highest level of data quality. All the accuracy and confidence needed for critical decision-making.

Additionally, Finicity’s solutions mitigate risk for lenders and reduce liability for prospective employers. We act as a consumer reporting agency (CRA), so we follow strict standards that maintain the highest data accuracy and consumer protection.

First, our data meets and exceeds the demanding data quality requirements of investors and GSEs like Fannie Mae and Freddie Mac. In fact, our data is used for high-dollar decisioning governed by strict regulatory oversight, so it’s ready to be leveraged in any use case.

Second, we use consumer permissioning, which means that borrowers have control over how their data is shared and used. That’s a win-win for consumers, lenders, landlords, and employers. 

Third, we implement best-in-class physical, technological, and procedural security safeguards similar to those used by major banks, credit card companies, and trading firms. As security threats evolve, we evolve to stay ahead of the curve. 

How Finicity Is 3x More Successful Than the Leading Automated Verification Company

Currently, most businesses conduct verification of income and employment manually. For example, mortgage lenders contact employers directly to request income information and other documents. They’ll ask for verbal confirmation, or they may need to wait for fax or email verification. Sounds pretty old-fashioned, but that’s still the way a lot of this business is done.

Even some forms of online income verification may be slower or less secure than they could be. In today’s fast-paced, threat-laden business world, that’s bad news. Finicity’s VOIE solution was designed with these issues in mind, and our solution is three times more successful than the leading automated verification company. 

  • When compared with other automated VOIE options, our solution allows three times as many borrowers to instantly verify income and employment. 
  • Over 96 percent of employees are using direct deposit, which means our solution is primed for covering almost all transaction data direct from financial institutions.
  • We cover more than 95 percent of consumer bank accounts, so we’re able to gain reliable access to the vast majority of transactions. 
  • And with over 75 percent cross-verification available, we’re confident our data is as accurate as it could be. 

Employment and income verification services help businesses and consumers take wiser financial risks. To learn more about how Finicity’s VOIE service can help you make smart decisions, request a demo of our income and employment solutions.