Agreement Express and PYMNTS.com: Building Your Roadmap to Better Customer Experience and Compliance
Download as PPTX, PDF1 like1,057 views
The document discusses building an automated underwriting roadmap to improve compliance and customer experience in merchant onboarding. It emphasizes understanding human buying behavior, developing a clear statement of intent, and minimizing process complexities while adhering to the Electronic Transactions Association's guidelines for underwriting. Continuous monitoring and evaluation of underwriting processes are crucial to ensure effectiveness and optimize growth strategies.
Agreement Express and PYMNTS.com: Building Your Roadmap to Better Customer Experience and Compliance
- 1. Building Your Roadmap To Better Compliance And Customer Experience Presented by Mike Gardner, Hosted by Karen Webster June 25th, 2015
- 2. In case you’ve seen this movie before… In my most recent webinars I’ve focused the process for achieving automated underwriting – today we’ll cover some of that, but also on a request from attendees Statement of Intent Process Flow Evaluation Criteria Assisted Scoring Increased Automation Automated Underwriting
- 4. In merchant onboarding an extraordinary client experience begins with a great underwriting process
- 5. Now that I’ve got your attention, let’s begin
- 6. What you will learn today: 1. Human buying behavior and some the key drivers of that behavior 2. How those behaviors shape consumption and adoption 3. What your underwriting process can do to positively, or negatively, influence that behavior 4. What to consider when developing an automated underwriting roadmap 5. How your underwriting team can contribute to your growth strategy
- 7. What I think of when I hear “buying behavior”
- 9. • Why are you attracting merchants? – Are they paying too much today? – Do they want to increase their profits? – Are customers abandoning them because they don’t offer payment options they want? – Do they have employees complaining that their current payment process is too hard? We gravitate to solutions
- 12. Convenience
- 13. • The variety store in your lobby • The mobile phone that already has your music, contacts, and your apps • The transit option closest to your departure and destination Convenience
- 14. • Consumers and users fall into two broad groups – Those with choice – Those without choice (or minimal choices) • The group your target clients fall into will dictate which of the 3 possible adoption profiles will be in play Adoption Drives Growth
- 15. Three accepted profiles for product adoption Unless your target merchants have no other choice than to work with you, and your sales channels have no other choice than to sell for you, you won’t ever have Hype-Cycle Adoption
- 16. But what does this have to do with Underwriting?
- 17. Underwriting governs your client experience Most organizations today are underwriting with people, doing a largely manual assessment, to determine if merchants fall into a “bucket” of Pass, Fail or Monitor. As organizations move to more advanced, rigorous and automated underwriting, they risk adding more hurdles for the merchant.
- 18. The more complex your underwriting requirements, the more your on-boarding experience will reflect that complexity Complexity Drives Inconvenience
- 19. You’re not working in a vacuum As you design your underwriting process you are designing your customer experience • Nice to have instead of necessary • Difficult to gather instead of at hand • Challenging to execute instead of easy • Hard to sell
- 20. Hang on - We’ve got rules to follow here!
- 21. • The ETA (Electronic Transactions Association) is the trade association representing the payments market. In 2014 they published a 109 page document providing guidelines for merchant and ISO underwriting. It is important to note that the ETA does not set policy for its members, it provides recommendations. Members are not required to adhere to the guidelines provided. The ETA Risk Guidelines
- 22. Underwriting Objectives • Identity – Know the identity of the merchant and business owners • Validity – Confirmation you know the business the merchant is really in • Legitimacy – Ensuring the business is bona-fide business • Financial Acceptability – Determining if the merchant fits the financial constraints of the firm • Risk Level – Evaluating the level of risk associated with the merchant Qualify Score
- 23. Start Off Right • Define your Statement of Intent and use it as your base filter: Organizations applying the ETA guidelines are expected to have a “statement of intent”. – Declare who you’re planning on doing business with and why and bias your process to move them through quickly – Be clear about which types of companies, areas of business, and marketing practices you absolutely won’t do business and knock them out fast • Understand the difference between Restricted vs. Prohibited Merchants: There is a material difference between a Prohibited Merchant (a merchant that should be blacklisted) and one who is Restricted. – Don’t treat restricted merchants like they are criminals
- 24. Minimum Viable Process • Your Statement of Intent as your base filter: – Bias your process to move your target merchants through quickly – Knock out merchants you don’t want fast and efficiently – Hide the complexities in the back-end process, not in the front-end onboarding • Categorize your Restricted Merchants appropriately: – If they just require more frequent monitoring then don’t add more data collection to the onboarding – Simplify your requests for merchant information and consider the form factor of the source information you’re requesting
- 25. Don’t get ahead of yourself Statement of Intent Process Flow Evaluation Criteria Assisted Scoring Increased Automation Automated Underwriting
- 26. Get to process flow and evaluate Process Flow Evaluation Criteria Assisted Scoring Increased Automation Automate the flow to create a consistent, auditable process Codify each data-point into a weighted numeric value Tune and adjust automated score values to match manual evaluations Monitor and adjust while replacing manual feeds with automatic
- 27. Good Process Flow Hygeine • The ETA recommends firms employ and underwriting process that has the following attributes: • Timelines (SLA’s) for underwriting evaluation are established • High Risk or Restricted Merchants are evaluated by more senior staff (escalation) as appropriate • Title and/or Position of ALL approvers are captured during underwriting • Escalation processes/criteria are documented • The underwriting process is documented and auditable, as well standardized as much as possible.
- 28. Why follow the ETA Guidelines? • What’s really good about the guidelines – Comprehensive – Create a defensible framework – Safety in numbers • What’s the challenge with the guidelines – Not easy to fully automate – Directional in nature but not prescriptive – Danger of over specification of risk model
- 29. How do you know it’s working? 29
- 30. Once you begin to collect scores you will begin to develop a profile of your merchant applicants Too Risky to do Business With
- 31. Just measuring rates of pass or fail simply isn’t good enough
- 32. You must monitor and understand the distribution of your underwriting Risk Tolerance is set too high OR Sales are being too conservative Risk Tolerance is set too low OR Sales are being too aggressive
- 33. But when we use lots and lots of data sources in our underwriting, you increase the probability that your data potentially “overlaps.” This is a “specification error” and I can almost guarantee that if you’re scoring, you’re over specifying.
- 34. Summary: • Refine your Statement of Intent so that it is clear who you are after and who you are not • Determine if your targets have abundant choice or limited choice • Define the Minimum Viable Process for underwriting the various target groups • Minimize the complexities and eliminate any over specification • Continuously monitor the shape and distribution your scores, not just the rate of pass or fail
- 35. To learn more about Rapid Customer Onboarding, and how it impacts and shapes underwriting in the payments market, visit us at www.recombo.com , follow us @agreexp on Twitter, or contact me directly at mgardner@recombo.com
- 36. Download Your Advanced Copy of Our Digital Guide: Building Your Roadmap to Underwriting Automation Download The Digital Guide