The rise of fintech technologies, now, more than ever is affecting consumer behaviors. Today, consumers possess multiple bank accounts, utilizing a wide array of payment instruments and high-frequency usage of debit cards, (especially virtual, private labeled, and those linked to rewards). This behavior adds a layer of complexity to the measurement and management of risks associated with extending credit and issuing financial services. Additionally, the successful collection of funds, due to regulatory changes and the aforementioned consumer behavior, has become increasingly difficult to automate and manage for many businesses. The two factors contributing to the remediation of this problem, have long been utilized separately, data and payment instruments (bank accounts and debit cards). ValidiFI has developed a disruptive technology, the Payment Risk Optimizer (PRO) platform, that leverages data and payment instruments for the purposes of improving payment processing success rates, efficiency and compliance.
Data and Payment Instruments Improve Payment Processing
Historically, data and payment instruments have worked side-by-side for the purpose of fraud and marketing, but not for processing a payment successfully. In the past ACH has been blind to whether it will be successful, but with the advent of ValidiFI’s technology and same day ACH there are new and innovative ways to process payments. “We can now essentially process an ACH like a debit card”, says Jesse Berger, COO at ValidiFI. ValidiFI has developed the PRO platform as the convergence of this union between data and payment instruments, to specifically address this issue, while still empowering financial servicers to originate, acquire new customers, and increase revenues. The PRO platform provides the ability to obtain consumer insights through Artificial Intelligence (AI) by pulling in thousands of data sources to measure risk and validate that the account is still open and that there are enough funds for the payment to go through successfully. Additional feature for the PRO allows you to automate payments to match payroll schedules with payment dates, configure intelligent presentment timings, and much more.
PRO Enhances Performance
Automation is not enough to adapt to the changes in the digital landscape. Businesses still playing catch up to the digital shift are losing revenue rapidly because of manual processes. ValidiFI’s independent survey of current customers, revealed that a financial service provider can incur an additional 3.8 hours of personnel hours per loan, to manually collect on existing customers. Not only does this cost financial service providers soft money, it also costs the provider hard money in the sense that these employees could be acquiring and originating new customers, informing current customers about new products, or answering customer service questions. The PRO platform addresses the issues tied to operating expenses and the soft costs that businesses incur by removing manual processes for least cost routing and selective cost routing, using AI and ML to solve these business challenges.
PRO Improves Compliance
Data intelligence has improved the efficiency and profitability of merchants in many ways but there hasn’t been a comprehensive solution until now that ensures a payment instrument is owned by the person. In light of recent regulatory changes with the new NACHA regulations and the Web Debit Rule, it is imperative that financial service providers have technology that can enable them to more successfully identify account owners and simultaneously process payments. The PRO platform saves millions of dollars in return fees for the lender and consumers by validating that the account is owned by the person, is still open and that there are enough funds available for the payment to go through successfully.
ValidiFI will be hosting a webinar about the new NACHA regulations and Web Debit Rule to further educate lenders about how these new changes impact them.
Recently, a financial service provider was losing efficiency and profits with third-party collectors. ValidiFI took thousands of their accounts in collection status, that would’ve otherwise been sold to a third-party, and ran it through the PRO. The PRO identified hundreds of accounts with enough funds to collect payments on a single day. Had these accounts gone to a third-party collector, and if they were even able to collect, the provider would’ve only received pennies on the dollar, after likely waiting months. Instead, the PRO identified the accounts that had available funds and that enabled the provider to collect hundreds of thousands of dollars.
Contact ValidiFI today to learn more about the PRO platform and to find out how the convergence of data and payment instruments can transform your business.