The Importance of Using Quality Bank Routing Number Data

Companies involved in the business of processing transactions understand the importance of reliable access to quality financial institution data. Lyons Commercial Data’s Editorial and Research Department compiles and ensures quality in the company’s bank routing number database by using a variety of internal and external resources. The department monitors merger activity, conducts annual audits of every US financial institution, and receives calls from thousands of financial institutions that report their own changes. Additionally, the department uses the Internet to research pertinent events in the financial world. The information gathered is then cross-referenced with various outside sources including the US Federal Reserve, the Office of the Comptroller of Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA). Research results are posted only after the information compiled has been verified.

Free or lower-cost databases are available from various sources, but are not suitable for use in transaction processing systems. The databases are deficient as reference tools because they are neither accurate nor complete. In general, the flaws of these low-quality tables can be summarized as follows: (1) they fail to track thousands of institutions with multiple, valid routing numbers; (2) they are either infrequently updated, or not updated at all; (3) they do not account for routing numbers used by multiple institutions; and (4) they cannot be keyed or customized for specific payment applications.

To appreciate why the aforementioned flaws of competitors’ databases can be costly, it is important to understand why these features are essential. First, thousands of financial institutions have more than one valid routing number. As financial institutions are purchased or merged with other financial institutions, the routing numbers of the acquired financial institution may remain valid for many years. It is not uncommon for financial institutions to merge multiple times within one or two years and have six or more valid routing numbers. Failure to include these additional routing numbers in the verification process can create unnecessary rejections when accepting WEB, TEL, POS, Direct Deposit or other ACH transactions.

A second problem with competitors’ databases is that they too often fail to update their data. Lyons’ Research Department updates the database daily and makes thousands of changes each month. Unlimited FTP updates ensure access to the latest information.

Competitors’ products and services also fall short because they do not account for routing numbers shared by multiple institutions. There is a common misconception that routing numbers are unique identifiers. They are not. Many small banks and credit unions use routing numbers assigned to larger institutions for checks, wire transfers, and ACH transactions. Lyons tracks these parent/child relationships among institutions, and experienced database experts key and customize the database for a variety of applications. No other industry provider offers this service.

Additional benefits of Lyons Commercial Data’s database include: flexible options for access (Online Routing Number Search, XML Web Services, and database download) and optional fields including department phone numbers, mailing address, and URLs. A secure and completely redundant data center ensures business continuity for all Lyons products and services.

Thousands of financial institutions, payment processors, and government agencies, including the US Federal Reserve, continue to rely on information from Lyons Commercial Data. Lyons created the first Windows-based directory of bank information more than a decade ago. Today, they are the industry leader in seamless integration of transaction-critical information via database delivery and web services.

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