UDM- The Uncharted Genesis (Part 1)
You’ve seen the pieces… but never the whole picture!
For the past two years, in 40% of our blog, we’ve untangled the complexities of dispute and chargeback management, peeling back layers, exposing inefficiencies, and introducing UDM (Unified Dispute Management) as the ultimate fix.
But we never revealed how UDM was created and what challenges we overcame to bring it to life.
So, here’s a interview with Vishwanath Vijayan, our CTO, who doesn’t just explain what UDM does, but takes you to the very heart of its origin.
You knew only half of the story!
Ready to step into the unknown and uncover UDM?
1. What are the biggest challenges faced by banks in dispute management?
Banks face significant challenges in dispute management, processing millions of daily transactions with disputes arising from fraud, technical issues, or chargebacks. Traditional dispute processes often take weeks, leaving customers frustrated, with minimal visibility into fund movements and dispute status, ultimately eroding trust in banking services.
2. What gaps exist in the existing dispute processes?
- Manual Handling & Delays: Manual workflows cause significant delays, risking compliance and customer satisfaction.
- Lack of Real-time Dispute management: Traditional systems fail to analyze transactions in real-time, resulting in unnecessary escalations and operational inefficiencies. Although networks allow real-time dispute filing and response, banks fail to fully utilize real-time APIs due to inflexible platforms.
- Fragmented Systems: Banks handle disputes across UPI, cards, and payment gateways (PGs) separately, with no unified platform to track and automate resolutions. This results in duplicate efforts and inefficiencies.
- Compliance Risks: Complex regulatory requirements demand precise response timelines and evidence submission, exposing banks to potential financial penalties if not met. Compliance also demands adherence to network and central regulatory authorities like RBI.
- Poor Customer Experience: Lack of proactive updates and prolonged resolution processes frustrate customers, driving potential churn and increasing operational burdens.
3. How do chargebacks and fraud impact a bank’s reputation?
4. What were the core design principles behind UDM?
UDM addresses inefficiencies in traditional dispute resolution through automation, intelligence, and scalability. It ensures seamless dispute handling across UPI, card networks, FASTag, and PGs while maintaining compliance and reducing operational overhead.
Core Design Principles of UDM:
- Event-Driven & Scalable Architecture: UDM is built to process millions of dispute events in real-time, ensuring low-latency decision-making and horizontal scalability.
- Cloud-Agnostic & Modular: Built as a microservices-based, cloud-agnostic system supporting on-premises, private, and public cloud deployments.
- AI-Powered Auto-Decisioning: Integrates machine learning to analyse dispute patterns, reducing false positives and enabling faster resolution.
- Domain-Driven & Unified Processing: Applies Domain-Driven Design (DDD) for unified workflows across UPI, cards, NPCI products, PGs etc.
- Compliance-First Approach: Automates regulatory adherence, ensuring timely responses, evidence collection, and SLA tracking.
- Seamless API Integrations: Provides secure APIs to integrate with core banking, payment networks, and merchant systems.
- Observability & Self-Healing: Offers real-time monitoring and auto-recovery of failed workflows for uninterrupted operations.
By combining AI, automation, and a domain-driven approach, UDM enhances efficiency, reduces fraud, and delivers a superior experience for banks, merchants, and customers.
5. What were the toughest engineering challenges encountered while building UDM?
- Diverse Network Integration: Unifying disparate dispute processes across UPI, cards, and other payment networks.
- Regulatory Compliance Automation: We had to scour through scores of compliance procedures across the globe to build a well-rounded automated SLA and evidence management.
- AI-Powered Data Handling: Deploying the right AI-driven OCR to process both structured and unstructured dispute data.
- Flexible Dispute Filing: Figuring out the right way to support both real-time API and batch file submissions for various systems.
- High-Volume Scalability: Making sure the system can handle millions of transactions with minimal delay by a series of repeated test drills.
- Secure System Connectivity: Establishing secure and seamless API integrations with existing banking systems by testing out the endpoints religiously.
6. How does access to real-time data help in dispute resolution?
7. What key performance metrics define success for UDM in a banking environment?
The following KPIs define UDM’s impact in a banking environment:
- 80% Reduction in Manual Effort: UDM’s AI-driven automation minimizes manual intervention in dispute filing, document validation, and resolution workflows, boosting bank’s operational efficiency.
- Zero Invalid Disputes: Intelligent dispute classification and rule-based validation prevent invalid disputes, reducing operational costs and ensuring compliance.
- Timely Communication: Real-time notifications via email, WhatsApp, and mobile apps keep customers informed about dispute status and actions.
- Faster Dispute Resolution: Automated evidence collection, SLA tracking, and response submission ensure disputes are resolved within or before network-mandated timelines.
- High Accuracy in Decisioning: AI-powered decisioning enhances precision in handling chargebacks, reversals, and re-presentments, minimizing stakeholder back-and-forth.
8. How does UDM ensure both card network and regulatory compliance?
- Automated Rule Engine: Maps dispute codes, chargeback timeframes, and evidence requirements in real time, ensuring compliance with Visa VCR, Mastercard MCOM, and NPCI guidelines.
- SLA Tracking & Audit Trail: Auto-tracks dispute lifecycles to meet mandated timelines (e.g., T+1 for UPI, 120 days for card chargebacks), with immutable audit logs for regulatory reporting.
- Automated Evidence Management: AI validates and submits complete, compliant supporting documents, preventing disputes from being rejected due to missing evidence.
- Data Privacy & Security: Adheres to PCI-DSS and RBI data localization norms, ensuring secure processing of sensitive cardholder and transaction data.
- Real-Time Compliance Alerts: Warns banks about potential compliance breaches, invalid disputes, and SLA violations, preventing penalties and dispute overturns.
You think this is the end?
Most certainly not, it is just first stop…
Stay sharp… the next part is closer than you think.
P.S: What topic do you think we should explore next? Let us know in the comments.
