Compliance reporting is a part of merchant underwriting that involves gathering critical merchant information to submit to your sponsor banks, risk committee or auditors. Although it’s a necessary step, it can be a slow, frustrating task, costing payment providers up to 30 minutes or more for each new merchant they approve.
Although 30 minutes may not sound like a lot, the proof of decision reporting process is often a massive drain for risk-bearing providers like wholesale independent sales organizations (ISOs) and payment facilitators (PayFacs) who work with hundreds or even thousands of merchants per year.
Thankfully, innovative tools like NMI’s Decision Report (the newest feature in our ScanX automated risk underwriting platform), can help providers minimize the time, costs and headaches traditionally associated with compliance reporting.
With these tools, ISOs and PayFacs can automatically generate thorough compliance reports whenever a new merchant is approved. Because each report is custom-tailored to include all the key information required by the sponsor bank, teams won’t have to worry about wrangling manual data entry; instead, they just need to approve a merchant and the report automatically generates.
But how exactly does automated decision reporting work? And how can it benefit your business?
The Task: Reporting Compliance Requirements to Sponsor Banks
Underwriting your own merchants is a big responsibility. To ensure providers are running a tight ship, sponsor banks require wholesale ISOs and PayFacs to regularly submit compliance proof of decision packages.
While each sponsor bank will have its own specific requirements, providers typically need to submit the following documents:
- Proof of Decision (Underwriter, Date/Time, Decision)
- Risk Review Comments
- Tax ID Verification Results
- MATCH Terminated Merchants Search Results
- KYC & KYB Identity Data Verification Results
- Banking Data Verification Results
- Beneficial Owner Credit Reports
- Website Risk Review
These compliance items provide the bank with a record it can maintain and review when necessary. They also keep providers on their toes, ensuring they don’t give in to the temptation to take shortcuts in the risk assessment process — a real problem in manual underwriting.
The Problem: Time-Consuming and Error-Prone Report Compilation
Manual compliance reporting and underwriting are time-consuming and tedious, making it easy for errors to slip through.
For instance, after approving a merchant, underwriters have to manually source and compile compliance documentation into a single package before submitting everything to the sponsor bank. This process can easily take an underwriting team 30 minutes or more, with changing regulatory and bank requirements making it hard to ensure nothing is missed.
It’s important to remember that since risk-bearing payment providers are generally large to begin with, half an hour per merchant can amount to hundreds of hours annually.
Consider an ISO that onboards 1,000 new merchants to their platform. Over the course of a year, devoting 30 minutes to each merchant means that team members will spend 500 hours — 62 business days — gathering and submitting compliance documents instead of serving customers and growing the business.
Manual reporting is a headache and a drain on resources. It tacks unnecessary time onto a process that (ideally) should go faster, not slower.
Thankfully, there is an alternative.
The Solution: NMI Decision Report
NMI Decision Report is the newest feature built into our ScanX automated underwriting system. Just as ScanX uses automation to turn underwriting from a days-long bottleneck into a fast, frictionless process, Decision Report automates compliance reporting so underwriters can focus on more important work.
Here’s how it works:
- Step 1: After a merchant is approved, the Decision Report tool pulls all necessary compliance information from the data already in ScanX
- Step 2: The system automatically compiles everything into a single, customizable PDF formatted to meet the exact requirements of the sponsor bank
- Step 3: The report is ready to use. It is automatically posted to the connected CRM or system of record so users can track the merchant onboarding process from signup to processing
After completion, users can either download reports individually or en masse upon request. Because the reports are automatically posted to the CRM of choice, Decision Report users can find all of their critical data in one place, without the need for manual review or intervention.
Rather than spending an additional 30+ minutes on each merchant, Decision Report makes compliance reporting near-instantaneous, freeing up time and resources so payment providers can focus on their core mission — delivering great service to merchants.
Regardless of how regulations change or how sponsors may adjust their requirements, Decision Report will ensure the necessary compliance data is included each and every time. With this tool, payment providers can not only meet but exceed their partner banks’ compliance requirements with minimal effort and time to spare.
Let Decision Report Save You Time and Money
Decision Report is now available as a stock feature inside NMI’s ScanX automated merchant underwriting system. It integrates seamlessly with not only ScanX but also NMI Merchant Central and our complete Merchant Relationship Management system.
If you’re ready to see how ScanX and Decision Report can make your underwriting fast, frictionless and accurate, reach out to a member of our team today.
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