A Checklist for Bank Due Diligence

Any company that wants to work directly with a bank must successfully complete the bank due diligence process. This Journal provides an actionable checklist for companies preparing for this process with a bank partner.

August 23, 2022

Pranav Deshpande PMM

Bank due diligence, also known as bank underwriting, refers to the process commercial banks use to assess the risk of partnering with a company that provides financial products or services.

During this process, companies need to demonstrate to banks that:

The bank due diligence process starts with the company gathering materials that represent its operations to the bank, and in particular, describe the company’s ownership structure, business model, and compliance program.

As we’ve discussed previously in the Journal, there are numerous long-term benefits to sitting in the flow of funds by partnering directly with a bank: more control, visibility, and faster payment processing times. Leveraging these benefits requires successfully completing the bank due diligence process, which may require an upfront investment, especially if this is your first time partnering with a bank.

This six-part checklist outlines some of the questions you are likely to encounter during the bank due diligence process. While by no means exhaustive, our hope is that it helps you better prepare for the underwriting conversation with your partner bank.

1. Business Information

You will need to share materials that allow bankers to fully understand your business. These include: basic company information, your company’s financials, your flow of funds, and your product features.

Core Business

Business Model