The power of data automation to underwrite merchants – The Paypers

In this joint article, Ingo Ernst and Chantel Meeley from 4Stop explain how to obtain a fully dynamic and seamless underwriting process for merchant with enriched data

Businesses that emerge and engage in our ever-changing, fast-paced global online ecosystem require significant virtues composed of steadiness, stability and adaptability. Companies are continually managing outside forces from savvy competitors, technology demands, customer engagement preferences, regulatory evolutions, and economic changes. It is essential for businesses globally to rethink strategy, sync with leading technology developments and adapt their business mantras with dynamic decision-making intelligence to maximise their business performance potential and have empowerment for continued innovation.

Underwriting merchants is a vital part of businesses sustainability. Its the first level of defence against fraud and illicit activity towards an entity. However, for many businesses worldwide, obtaining a harmonised view of the risk associated with onboarding comes with an array of cumbersome processes and manual due-diligence. Manual processes bring an abundance of cost and resource demand to an entity along with long-delayed onboarding times, which, in turn, affects the viability of business revenue.

So how as an industry do we improve our first level of defence? How quickly can we have quality merchants in the pipeline? How fast can we verify businesses and directors and dramatically improve the time it takes to onboard our merchants?

Leveraging modern technologies such as data automation paired with real-time analytics, dynamic decision-making frameworks and artificial intelligence solves the cumbersome annoyances of the manual due-diligence process. Ultimately, the only way to onboard merchants, directors, and customers with the confidence that risk is managed, and then verify every transaction afterwards is by having access to world-class data.

The payment industry is driven to protect and secure the ecosystem from bots, sophisticated fraudsters and large-scale data breaches. In the last year alone, we have seen a substantial increase in cyber-attacks, where security breaches increased11% this year from 2018, and within thefirst half-year of 2019, 4.1 billion records were breached. No industry segment is as committed to the fight against fraud than fintechs. Theyll invest more in advanced fraud detection and prevention technologies in the coming years than any other industry, and Gartner has stated that globally, it will reachUSD133.7 billion on cybersecurity by 2022.

If businesses have access to the same dynamic fraud detection and prevention technologies that are so well established for the B2C customer journey and implement these technology services towards their B2B relationships, it will eliminate the manual process burden - from obtaining all KYB verifications required such as credit reports, corporate structures, entity documentation, UBOs/directors verified against KYC checks through to clearly defined risk indicators all in an instant. They are obtaining a fully dynamic and seamless underwriting process regardless of global jurisdiction, all with a centralised view of checks and risk for every custom compliance workflow and on-going checks. There would be a new level of confidence obtained through trusted information and dynamic intelligence. Businesses would maximise fraud prevention from the first level of defence, accelerate their performance and ensure that every entity they onboard are the right fit for their portfolio and maintains a strong brand reputation continuously.

However, obtaining this data and automation can be an obstacle in itself for many businesses. With most of their fraud prevention focus put forth once a merchant is active with live volumes, integrating a single API to access data points for just one aspect of their underwriting process can take some businesses up to 6 months to implement. Establishing data access and automation for all segments of their underwriting can seem too much of an arduous task, leaving them forced to maintain their manual due-diligence despite the costs, resource demands and time associated.

As an industry, we need to continue our support for businesses that provide access to world-class data with data automation and dynamic intelligence. Partnerships have become increasingly prevalent, whereS&P Global 2018 Fintech Market Reportstates that Software-as-a-Service business model is being embraced more and more by Financial Institutions (FIs) globally as a part of their overall business strategy. Fintech segments are finding it more beneficial to license their innovative technology where, in turn, digital lenders see the actual benefits and ease in implementing technology services rather than building them internally. We are evolving into a genuine network of harnessed intelligence and technology to serve online engagement best. Access to all data required from one or even two APIs through fintech partnerships would impact our growing ecosystem substantially.

Data aggregation with automation is where the marketplace is going, and providers such as 4Stop know and understand the real value and impact enriched data experiences can provide a business bottom line. Allowing companies to refocus their energy and resources to doing what matters the most: growing their business, continuing their innovation and driving change for our online ecosystem.

About Ingo Ernst

Ingo Ernst is a committed fintech entrepreneur with extensive experience developing risk management and compliance software. He has proven significant virtues in managing outside forces from savvy competitors, technology demands, regulatory evolutions and economic changes in an unwavering, modest leadership style. From the conception of 4Stop back in 2016 he has been a driving force to 4Stops success. Leveraging his excellent technical knowledge, operations management and supervisory skills gained over 15+ years. Prior to 4Stop, Ingo was head of EMEA for Vogogo Inc. and held senior risk management positions at Deutsche Bank and Wirecard.

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The power of data automation to underwrite merchants - The Paypers