Online merchants face a significant challenge: balancing compliance with a seamless customer experience. Financial checks, such as affordability and income verification, are crucial for ensuring transactions are legitimate and that your customers have enough disposable income.

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However, these checks can be long and manual, overburdening compliance and customer support teams. This can lead to customer frustration and reduced spending, impacting both user experience (UX) and lifetime value (LTV).

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Compliance teams often struggle with unclear guidelines and repetitive documentation demands which lead to backlogs. This inefficiency not only slows down the verification process but also overwhelms customer support, leading to delayed responses and dissatisfied customers. Cumbersome income and account verification processes can drive customers away, reducing their likelihood of returning or recommending the service.

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In contrast, smooth and efficient financial checks can significantly enhance UX. Customers who experience a hassle-free payment experience are more likely to stay loyal, return frequently, and spend more. Positive experiences also lead to better reviews and recommendations, further enhancing reputation.

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One key to improving this process is understanding what to ask for and how to ask for it. Rather than asking your customers to upload documents that need to be manually verified, financial checks should be streamlined using new automated financial technology. Open Banking is an effective tool here, allowing for quick, secure and automated access to your customers’ financial data. This reduces the need for manual document handling and ensures compliance teams get the accurate data they need without overburdening them, and without frustrating the payments department.

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Open Banking not only minimises the number of steps customers needed to verify income, but also increases:

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Speed: Data is shared instantly, allowing for real-time checks and faster decisions.

Security: Customers share data directly from their bank, ensuring privacy and reducing fraud risk.

Accuracy: Access to 12 months of transaction data provides a comprehensive view of the customer's financial situation.

Implementing Open Banking not only eases the workload for compliance teams but also enhances the overall customer journey. Customers can quickly and easily complete financial checks, reducing frustration and increasing satisfaction.

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What to do next?

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By using a provider like Semla, online merchants significantly increase the accuracy of card-ownership identification & affordability, while decreasing costs, paperwork & time-to-money. Used by efficiency driven compliance and payments teams, Semla derisks digital payments via data.

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