Page 33 - Banking Finance May 2021

ARTICLE

Fallacies with the traditonal process signatories of the onboarding entity has any court cases
against them. Or, they may want to carry out a website
The traditional merchant onboarding process is fragmented.
check.
It is not seamless and convenient. Each step can take time
and face roadblocks. When that happens, there is more
delay until correct details are retrieved, documents backed, Help to identify fraudulent cases: The digital process can
or clarifications provided. Drawbacks of the manual process incorporate multiple layers of security checks and
are: verification. The use of AI in these checks helps increase the
1. Higher turn-around-time: It takes time for each step chances of identifying fraudulent cases with no chances of
to be carried out. The entire process for one merchant human error or oversight.
can take anywhere from 6-14 days.
Reduce overall TAT (turnaround time): Everything from
2. Manual form-filling: With merchants filling in the forms form filling, to document verification, background checks and
manually, there are greater chances of error. This will decision making is aided by digital alternatives. With this,
cause further delays later on in the process. The forms the average time to process an application is significantly
themselves are tedious to fill and are often abandoned. reduced.
3. No fraud detection: The traditional method does not
provide the security of advanced fraud detection using Expedite decision making: An underwriting tool
the latest technology. There are greater chances of incorporated in the onboarding solution can help deliver risk
fraudulent and higher risk merchants to make it assessment and KYC reports which helps officials make
through. decisions at the back end. This speeds up the decision-
making process.
4. Broken journey: The linear process is broken into
separate steps. Each step takes its own time and has
its own problems. The onboarding journey is far from
seamless and takes extra effort by both the merchant Workflow of the digitized process
and bank. An effective Merchant Onboarding Solution should consist
of four modules. Each tries to address a specific pain area
How does digitizing merchant of the client.

onboarding solve these problems? Front-end app: This is the sole point of interaction of the
Adopting a comprehensive Merchant Onboarding Solution merchant for the entire onboarding experience. It can be
can eradicate these pain points. It is the need of the hour in the form of a mobile or web-based application. An AI-
especially given our socially distant times. With the COVID- based OCR (Optical Character Recognition) performs
19 crises, face-to-face interaction has to be avoided. extraction at the front-end. It is optimal to reduce time and
Digitization is the solution. With the help of a digital process, error. With this technology, it is now possible to extract
the onboarding ordeal becomes a streamlined journey. Here customer details from their IDs. The field filling process is
is why:

End-to-end digital journey: It is not just one step which is
digitized, but the entire process end-to-end. This ensures
swift communication and rapid decisions. The workflow will
be explained in the next section.

Reduce several levels of manual verification: Apart from
basic compliance norms, an acquirer can require different
levels of verification. In a digital process, these can be
carried out simultaneously with the help of various APIs. The
verification journey in this case is customizable. For example,
some acquirers may want to check whether any authorized

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