Modern financial institutions should pay attention to multiple factors influencing user churn and conversions. One of them is automated merchant onboarding, which builds trust between a banking institution and a seller. It simplifies the whole process, making first steps of cooperation faster and smoother. The problem is that banks and FinTechs lose deals related to dissatisfying journey.
According to Forrester and other studies, over 64% of banks have experienced a loss in revenue due to problems in their current onboarding processes. That’s because merchants feel the onboarding is too complicated, and requires a large amount of information. Plus, not all information is necessary.
FinTechs need a digital footprint of the company, and that consists of name, address, billing information, etc. Traditional onboarding takes too long, automated merchant onboarding can have faults. How to improve it?
Ways to make automated merchant onboarding smoother
Centralize all operations within one digital space. Treat it like your command center. You can use Amazon Web Services for that, which we highly recommend in relation to our tech stack. The benefit that comes from this is very simple. You don’t need to search for anything. You have a one source of truth for everything merchant-related.
Make sure you have an intuitive user interface (UI) and user experience (UX). The more you expect from your audience and business partners, the smoother should be the related experience. A customer or a business partner should not waste time and wonder about features and different options. Nor ideas behind icons. Guessing and getting confused are never good signs for you. The clearer UI, the less work for your customer success team.
Implement the Know Your Customer (KYC) solution. This this probably the most annoying step for merchants, because it requires validation of customer details. With automated onboarding, you can make it more flexible and convenient.
Implement AML screening. It’s a little tricky because it’s a part onboarding, part taking care of your business in the first place. Anti-money laundering (AML) procedures are required by law (both local and international). They can vary from country to country, but nonetheless – they matter in the long run. Perform screens against politically exposed persons (PEPs), sanctions, law-banned shareholders, and more.
Introduce artificial intelligence (AI) and automation. According to Oracle, chatbots are responsible for $174 billion in savings across industries. And that’s annually. Why wouldn’t you take advantage of that? A chatbot can step in and assist a merchant in everything – from pointing out to explaining. You can also leverage automation. Sending emails to reach out customers who didn’t complete the onboarding is great in limiting user churn. They can even give you feedback why they didn’t complete the process. Maybe there’s still something unclear or they didn’t have the time to go through all the steps?
Include all major steps in the onboarding. Why it’s so important? To know what to automate. By including every step and eliminating those you feel unnecessary, you can either throw out or simplify until there’s nothing to improve.
Remember about: prescreening, identity verification (KYC), merchant history check, lead generation and prospect profiling, pricing and quotation, identification of significant business shareholders, history check, analysis of business and operational model, information on security compliance, assessment of credit risk. You can also check how customers are feeling about the merchant to further improve risk assessment.
Prepare a procedure for businesses that don’t fall within standard categories. It’s a tricky thing. Try and apply a scoring system to a friction of businesses that fall through the cracks and don’t belong in the grand scheme of things. It can be related to their nature, financial troubles, credit history or any other significant or minor, but still important, factor. And there you have it – manual onboarding. It’s time consuming, to think about creation of a special rule that can fit all non-standard merchants. You can also leave it and try categorize them.
Import and export your data on merchants. Take care of your legacy data and current state of business. Make sure that your software team augmentation specialists are informed about every record and piece of data you might need. They can prepare a solution for smooth migration.
Typical onboarding challenges faced by FinTechs and traditional banks
Traditional merchant onboarding is problematic because it requires the staff to manually transfer huge amounts of data from static merchant processing applications (MPAs). All the data must be manually transferred to make sure you have dot all the Is and crossed all the Ts. It’s prone to error and can be very costly. Not to mention time consuming.
Digital and automated onboarding eliminates the necessity of handing over stacks of printed out documents. Submitting them online and automated the processing phase cuts short the amount of paperwork for everybody.
Another problem is missing out on digitally-native millennials that want everything and now. Digital processing of data and automating the whole thing is beneficial for them as well. They don’t need to wait that long, especially when it comes to FinTech. Millennials expect highest standards of care, give them that.
Benefits of digital automated merchant onboarding
By introducing digital automated merchant onboarding to your organization, you simply put a customer in the center. Customer centricity improve experience and grow the business. Traditional banks can compete with FinTechs and FinTechs are stay on top of their game.
On-site document handling and filling are costly. However, electronic KYC is inexpensive as it cuts the operation costs by up to 90%. Providing automatic verification cuts the cost of manual verification by humans. It boosts the overall efficiency of the operations of banks. Banks with lower operation costs attract more clients to them.
Automation gets rid of paperwork and enables you to quickly interact with the customer. That means less time for legal necessities and more time for doing business.
Digital onboarding process helps bring in steady revenue from your satisfied customers and convert them to repeat customers who will opt for other services and products related to finance. It will bring you opportunities to up-sell and cross-sell.
The problem with customers and compliance is simple – they don’t much. Compliance and boring but necessary. Customers are exciting but unpredictable. Onboarding is like compliance – it’s a phase that you need to get over and move on to more exciting things.
We can help you with that. Through React.js, Angular.js, Node.js and Ruby development, we can extend or create your product and tailored it to your specific needs. No two FinTechs are the same. We can also help you with previously mentioned AWS development. No matter what your goal is with onboarding – if you’re short-staffed, we can help.