Why Dual Approval Matters

Dual approval is one of the most important ways that financial institutions can help business owners fight cyber fraud. And the threat of cyberattacks continues to grow: During the first half of 2021, the banking industry reported 30% more ransomware attacks than in all of 2020, according to the U.S. Treasury's Financial Crimes Enforcement Network. Federal Reserve Chairman Jerome Powell has warned that cyberattacks represent the No. 1 risk to the global financial system.

Business owners who want to protect their accounts should ensure that their financial institutions provide dual approval, also known as dual authorization. Operating much as multi-factor authentication does to help secure personal accounts, dual approval helps ensure that only bona fide representatives are allowed to make transactions on your business accounts.


What is Dual Approval?

Dual approval is just what it sounds like: It requires two different operator identification codes to be used in order to approve all outgoing payment orders. When a bank has dual approval protocols in place, one business executive is not able to issue payment orders in a vacuum. Instead, every payment order requires the okays of two approved users.

Dual approval provides accountability and an extra layer of protection from account abuse internally, as well as fraud from external parties who might have gained unauthorized access to an account.

Every bank has a unique set of controls for approving and denying payment orders. In an age when most transactions are handled electronically and digital financial fraud is rampant, dual approval can add an extra layer of defense from it. Dual approval adds an extra layer of protection against illicit banking activities and helps prevent human errors by requiring an additional set of eyes on each transaction.


How Does Dual Approval Work?

Dual approval basically requires two separate people to authorize a transaction. The first person, known as the maker, creates the request. The second person, known as the checker, checks and approves the transaction. When both the maker and the checker have signed off on a transaction, it can be set into motion.

It's easy to set up dual approval on a business account, and it is available from City National at no additional cost.

When adding dual approval to your account, you'll be able to add individuals who are authorized to serve as makers and checkers, as well as set approval limits based on your business needs. You can also configure how you want the process to flow.

After you have set up the process, any eligible transaction will be automatically transferred to your pre-selected group of checkers to be authorized. As soon as one of the checkers is able to verify the request on his or her own device, the transaction will be released.


What Are the Benefits of Dual Approval?

Opting in to use dual approval offers a number of benefits to your business, including:

Avoiding Payment Scams

Cyber criminals can sometimes get around the digital checks and balances required to complete transactions. With dual approval, every transaction is double-checked by another human before it is authorized.

Deterring Internal Fraud

You may trust your employees completely, but employee embezzlement is an unfortunate reality. By requiring dual approval for transactions, you can make it much more difficult for an employee to conduct illicit financial activity against your business.

Reducing Human Error

Even the best employees (and business owners) sometimes make mistakes. Dual approval ensures that financial transactions will be double-checked with an additional set of eyes, helping to avoid potential errors.

Fighting Hackers

Through phishing and hacking, would-be criminals can sometimes access an employee's sensitive information, such as login data. Dual approval can prevent a hacker from completing the transaction because it requires two separate employees to log in and verify.

This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.