Streamlining marketplace vendor onboarding helps ensure the relationship with a seller begins with a great experience. It also establishes security and fraud prevention measures that build a sense of trust and safety.
Each marketplace is unique and serves a broad audience. Understanding the different risks presented by different audiences and adjusting onboarding accordingly can minimize friction and maximize risk mitigation.
A risk-based approach to onboarding provides that flexibility. It allows the marketplace to determine the risk level in a market segment and apply appropriate checks or countermeasures for that scenario.
Tiers of vendor risk
Creating broad risk categories can help marketplaces prepare for a wide range of scenarios.
Most vendors in many marketplaces don’t have massive transaction volumes or handle large payments. Many are small or home-based businesses and have no history of fraudulent activity.
A marketplace might emphasize getting those vendors up and running quickly by verifying the identity of the company owner. The marketplace can monitor the account and, if there are red flags, ask for additional information and reassess the situation.
As vendor transaction volume and payment size increase, so does the risk of financial crime. That, along with other high-risk activities or regulatory changes, warrants additional due diligence.
For those situations, gaining deeper understanding of who owns or operates the business can either ensure the organization’s validity or prompt further verification.
For high-risk vendors, the risk-based approach might require additional due diligence, such as complete screening with detailed information on ownership and key personnel.
Enhanced due diligence could call for screening the company and its owners against global Anti-Money Laundering and sanctions watchlists.
Marketplace onboarding workflows
In some cases, regional regulations might require marketplaces gather information from multiple sources during onboarding. Efficiently collecting, sorting and tracking that information so it can be audited simplifies the demands on onboarding teams.
Gathering that information digitally and automatically can accelerate the process, minimize clerical errors and focus risk mitigation on the most critical cases.
Fine-tuning a risk-based approach to onboarding depends on how well a marketplace optimizes information-gathering workflows. The more workflows there are, the more nuanced the process can be.
Workflow planning includes deciding:
- How many workflows are realistic
- How long it takes to create a new workflow
- How good the analytics are
- How long it will take to understand the effects of workflow changes
- How long it takes to modify an existing workflow
Many onboarding systems require coding and development time to make even the most straightforward workflow changes. Flexible tools that enable quick workflow deployment can help risk-mitigation professionals establish the right controls for different scenarios.
Digitally acquiring documents for verification and storage can also save time and effort. Those records also provide further risk-mitigation assurance for marketplaces.
Creating positive vendor onboarding experiences
Effective business verification gathers information from customers, registers and third-party databases. Automated workflows or internal teams can then analyze that data to determine if a vendor is qualified for a marketplace.
That process can be quick and straightforward. In many cases, vendors can provide essential business information and gain onboarding approval without reams of paperwork and multiple back-and-forth requests.
Effective marketplace onboarding starts the business relationship with trust and a positive experience, allowing vendors to quickly start transacting. With a proper risk-based approach and technology that allows for adaptable, automated workflows, marketplaces can minimize delays and maximize safety.