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Provenir: Forging Future-Proof Buy Now, Pay Later Offerings

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As the BNPL space matures and expands rapidly, organizations need to infuse their go-to-market strategies with advanced technology to make these programs sustainable – to manage risk and respond quickly to market needs and imminent regulations, and to be agile to shift as needed to adapt and keep pace with the evolving regulatory environment, as well as serve customers throughout the lifecycle.

Chris Kneen, General Manager UK at Provenir, explains how technology decisions made now will have a direct and tangible impact on the future adaptability, growth and longevity of your BNPL offering.

Here are three key technology requirements to consider:

  1. Ability to quickly leverage alternative data beyond traditional credit checks and promote financial inclusion

In the high-risk, fast-moving BNPL sector, risk decisioning that’s accurate and based on real-time information is essential. Basic, soft pull credit checks often don’t report the most recent activity; this can make decisions riskier and less accurate.

Looking to data outside of the traditional credit score, such as behavioural scores, telco information, fraud insights transactional data and open banking, can offer BNPL providers real-time insights into affordability and risk. To improve decisioning accuracy, seek to leverage data from a wide variety of sources. Leveraging alternative data for credit decisioning also makes BNPL initiatives more inclusive, bringing the power of credit to consumer segments that have traditionally been underserved and overlooked.

New approaches eliminate hard coding to streamline data integrations, empowering users to quickly integrate and test new data. And the market is shifting toward the best-practice approach of using prebuilt connections to data vendor APIs that reduce integration times from months to minutes. This emboldens BPNL initiatives with newfound agility to access and use data where needed across decisioning processes, onboarding processes, and/or for performance analysis.

  1. Rapid onboarding for merchants and customers to accelerate time-to-market

Improving the ease and velocity of the BNPL onboarding experience for both merchants and customers is vital. After all, the onboarding experience is the first customer impression and a critical first interaction. According to recent research, unless a financial institution can open a new account or complete a new loan application in less than five minutes, the potential for the consumer to abandon the account opening increases to as much as 60 per cent or more. Alternatively, faster account openings reduce abandonment rates down to 25 per cent or less.

Automation in digital onboarding can significantly minimize customer effort. Ideally, automation augments customer data with the additional information needed to perform robust compliance checks, identity verification and risk decisioning all in real-time.

  1. Support for the full customer lifecycle

BNPL providers must grow and nurture customer relationships throughout the customer lifecycle. Look for technology that is extensible to support all aspects of the customer lifecycle, from onboarding to fraud management and ongoing credit line management to collections.

Having a single enterprise risk decisioning ecosystem to manage the entire customer lifecycle results in smarter decisioning and superior consumer experiences. BNPL providers require dynamic decisioning to constantly review credit line increases/decreases at the account and customer level to ensure they maximize checkout completion for the merchant while ensuring they are monitoring/adjusting affordability in real time to meet regulatory requirements.  When all customer and decisioning data is consumable by that ecosystem, it eliminates data silos that prevent the business from fully identifying risk and empowers rapid iteration and innovation as well as greater operational efficiency and cost savings.

Building Your Buy Now Pay Later Offering for Speed, Agility and Sustainability

BNPL providers can gain tremendous advantages in architecting their BNPL offerings for speed, agility and sustainability. Careful forethought and purpose-built technology can address these key elements for competitive advantage.

About the Author

Chris Kneen serves as General Manager, UK, for Provenir, a global leader in risk decisioning and data analytics software. Chris is responsible for establishing and expanding Provenir’s footprint across the region, working closely with partners and the company’s regional and global teams to accelerate growth and support clients.

 

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