In this episode of FinTech Confidential, host Tedd Huff sits down with John Gordon, CEO of Validify. The discussion centers on changes in financial technology, focusing on account validation, customer risk, and fraud detection. Gordon, with over 25 years in financial services, shares insights based on his experience with companies like TransUnion and Validify.

One of the early highlights is the shift in consumer banking habits. Gordon mentions that 96% of U.S. households now have access to bank accounts, which shows a significant change in financial accessibility. However, this increased access brings new risks. Validify’s research has shown that users with more than two email addresses in a 30-day period may pose a higher risk. Also, landline phones, despite seeming more stable, often show higher risk levels compared to mobile or prepaid phones.

ACH transactions are another main subject. They are still the most common payment method in the U.S., and Validify continues to track trends and problems linked to them. Gordon explains that accounts marked as high-risk show 11.5 times more ACH returns than low-risk accounts. These returns often cause financial losses, especially when consumers use first-party fraud techniques, such as taking out loans and avoiding repayment. Validify helps clients identify these risky behaviors early using detailed account data.

A key part of the conversation is on virtual demand deposit accounts (DDAs) and their effect on assessing customer credibility. Gordon describes how these virtual accounts, often used with neo banks or digital-only banks, can make it harder to connect account behavior with the actual consumer. Some lenders have become cautious about these accounts due to their limited historical data and inconsistent usage patterns. Validify works to help businesses distinguish between virtual and traditional accounts so they can better understand risk.

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The episode also covers customer acquisition. Fraud at the onboarding stage can result in substantial losses. For example, if a personal loan is funded to a fraudulent bank account, the lender may have no way to recover the money. Validify uses connections between identifiers like phone numbers, email addresses, and accounts to offer a fuller picture of the applicant’s stability.

Validify’s partnership with PDI Technologies is presented as a practical example. Through a pay-by-bank feature tied to loyalty programs at convenience stores, they offer a secure payment option without needing full account access. Many consumers prefer not to give full login credentials. Validify provides a way to validate account ownership and risk without needing full transparency from the customer. This helps reduce onboarding friction and ensures faster enrollment.

Artificial intelligence and alternative data play a large role in how Validify supports clients. Gordon explains that traditional credit scoring systems, which have changed little over decades, do not account for current financial behaviors. Many consumers now use Buy Now, Pay Later services or have irregular banking habits that are not reflected in traditional credit files. AI helps by analyzing updated data patterns, giving more accurate views of customer stability.

Validify also considers behavior like changes in contact information and shared account usage. For example, if a single bank account is linked to many users, or if an email address appears across multiple identities, that data is flagged for review. Validify aims to provide facts that support more secure decisions in lending, payments, and customer validation.

John outlines what he expects to see in five years. He suggests that customers will likely have more control over who accesses their financial data. While this may seem positive, he cautions that it can also make it harder for lenders to understand someone’s full financial situation. Partial data access may limit the ability to assess repayment ability, which could increase risk for businesses.

Validify’s position is to focus on delivering factual data without bias. They support financial inclusion but stress the importance of knowing whether a person regularly changes their bank account or contact information. These indicators help companies understand who they are dealing with, beyond just the basic identity check.

Fintech founders get a strong piece of advice from John.

Look at all parts of a customer profile, not just one or two data points. Stable customer behavior across phone numbers, emails, and bank accounts tends to indicate lower risk. He emphasizes that data connections are important for accurate assessments.

TThis episode offers a technical, clear view of modern fraud risks, account validation, and customer assessment. Validify’s work highlights how changing behavior and data sources impact decision-making in financial services.

TLDR:

Tedd Huff & John Gordon, CEO of ValidiFI, explore key shifts in Fintech and focus on Account Validation Technology . The focus is on account validation, fraud detection, and customer risk. With over 25 years in financial services, Gordon shares insights from his work at TransUnion and ValidiFI.

He explains how behavioral signals—like multiple emails, landlines, or shared accounts—can trigger higher risk. Gordon also breaks down why ACH transactions remain dominant, and how high-risk accounts show 11.5x more return failures. The episode covers challenges with virtual bank accounts, especially from neo banks, and how lenders can better identify stable users.

Linking emails, phone types, and account behavior can reduce fraud and improve onboarding. Using AI and alternative data fill gaps left by outdated credit models, especially for BNPL users or consumers without full credit files.

John predicts a rise in consumer control over financial data and warns that limited access may hurt repayment assessments. For fintech founders, his advice is clear: look at the full data picture account history, contact info, and usage to make better, faster decisions.

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Key Highlights:

Email Addresses Could Be Warning Signs

People using multiple email addresses in a short time often show patterns linked to risk. A spike in different contact points within 30 days can indicate account instability or misleading information. Data like this helps financial tools determine if someone should be flagged for extra checks or treated as low-trust.

Landlines Are Worse Than You Think

Landline numbers may seem secure, but they’re often the least trusted. There’s less usable data tied to them, which makes it hard to link them to actual people. Limited updates, rare usage, and a shrinking number of users make landlines a weak source for identity confirmation.

Your Phone Type Says More Than You Know

Phones are more than contact devices. The service provider and type—prepaid, mobile, or VoIP—offer insight into reliability. Some number types are linked with higher risk or limited traceability. These details can affect whether a person gets approved or flagged.

Fake-Looking Behavior That’s Actually Fraud

A real name and bank account aren’t always safe. People get loans, receive money, then shut down or block access to their accounts. This isn’t always easy to spot, but it’s a known method used by those who never planned to repay. Spotting changes right after funding is key.

One Account, Too Many Users

If several people are tied to a single bank account, it can cause major problems. Accounts used across many applications often raise suspicion. Patterns like this make companies question if the user is legitimate or part of a larger fraud setup.

Why Some Banks Get You Declined

Certain online-only banks are seen as high-risk by lenders. They may offer easy access, but their accounts lack the depth of history needed for trust. Some companies automatically limit or deny applications tied to them, especially when paired with other risk factors.

ACH Still Beating Flashy Payment Options

Even with flashy new methods, ACH transactions are still on top. These payments keep growing every year. Real-time features and direct pay setups are being added, making them more flexible. Companies using ACH often lower costs while still using a dependable system.

Manual Processes Are Still Everywhere

Despite modern tools, many banks still use paper-based tasks. Faxed bank statements and scanned images are common when systems can’t auto-validate user data. This not only slows things down but increases operational costs.

Stopping Fraud Without Losing Good Users

Blocking threats without hurting sign-ups is hard. Some people leave when processes feel slow or too strict. Companies now use adaptive systems to change how much friction is applied based on behavior, helping reduce fraud without losing potential customers.

The Risk Hiding in Screen Scraping

Some tools pretend to be users just to get data. These methods, often used for speed, can expose people to risk without their full awareness. They also make systems more complex for developers. Verified data sources are more secure and reduce long-term problems.

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Takeaways:

1️⃣ This One Banking Habit Is Costing You

Some consumers use accounts for quick payouts and then block or cancel connections right after. This tactic creates repayment issues for lenders who have no way to recover the funds once disbursed.

2️⃣ What ACH Return Rates Are Hiding

Accounts marked as high-risk can return ACH payments over 11 times more than standard ones. Only a small percentage of these transactions ever succeed, causing heavy losses and broken repayment cycles.

3️⃣ Why Neo Bank Users Are Getting Watched

Lenders are now flagging users who switch to neo bank accounts mid-process. These changes suggest unstable patterns and can lead to tighter checks or automatic rejections.

4️⃣ Most Used Accounts Still Miss the Full Picture

A single financial provider often can’t see all of a user’s banking activity. This blind spot affects how risk is judged and leads to gaps in decision-making when approving new accounts or payments.

5️⃣ The $100 Pizza You Didn’t Know About

Paying with credit, then not clearing the balance, can multiply costs over time. A simple charge like a pizza order may end up costing much more when added interest and debt habits go unchecked.

Links:

John Gordon:

https://www.linkedin.com/in/johnfgordon/

ValidiFI

Website: https://validifi.com/

LinkedIn: https://www.linkedin.com/company/validifi/

X: https://x.com/validi_fi

Fintech Confidential

YouTube: https://fintechconfidential.com/watch

Podcast: https://fintechconfidential.com/listen

Notifications: https://fintechconfidential.com/access

LinkedIn: https://www.linkedin.com/company/fintechconfidential

X: https://X.com/FTconfidential

Instagram: https://www.instagram.com/fintechconfidential

Facebook: https://www.facebook.com/fintechconfidential

Time Stamps:

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About The Guest:

John Gordon - CEO - Validifi

John Gordon is the CEO of ValidiFI and brings over 25 years of experience in financial services technology. For the last 15 years, he has specialized in consumer alternative data solutions. John has held senior roles at companies including TransUnion, Online Resources, and Rivian. His focus is on helping clients solve complex problems in fraud prevention, risk analysis, and account validation. John takes a consultative approach with clients, leveraging data-driven strategies to improve accuracy, reduce loss, and increase operational efficiency.

Validifi

ValidiFI is a data and technology company focused on account and payment intelligence. Founded in 2014, ValidiFI delivers real-time insights that help businesses verify bank account ownership, reduce fraud, and comply with industry regulations. By combining bank-sourced data, payment behavior, and individual application information, ValidiFI enables smarter decision-making in onboarding, credit risk assessment, and customer validation. Its cost-effective and agile solutions are trusted by lenders, fintechs, and financial platforms looking to improve trust and reduce operational risk.

About the Host:

Tedd Huff: 

Tedd Huff is the Founder of Voalyre, a professional services advisory firm focused on global payments and DD3 Media.

Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements and user experience-driven value to simplify the complexity of payments.

DD3, Media: 

DD3 Media is a media creation, management, and production company delivering engaging content globally

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