Onboarding: it’s part of customer journey

Author: Ina Mackinnon, founder of Alba Compliance Pte Ltd

1. Automating Processes, Empowering Client Services

A complex onboarding process sets the tone for the entire client relationship. Onboarding becomes an important competitive differentiator, the first impressions do count. 

Financial Institution makes choices when presenting and managing those regulatory requirements with its the prospective clients, shaping up the first customer experience. On rare occasions the customer is thrilled to go through the process of having to provide information no matter how straight forward or good it is. 

According to the Global Legal Entity Identifier Foundation (GLEIF), more than half of all banking Relationship Managers spend more than 1.5 days (27% of their working week) onboarding new client organizations. That equates to 72 days or 2.4 months per year (taking a 48-week annual year) just on onboarding alone.

48% of global asset mangers surveyed by Fenergo said that they store a customer’s KYC or AML data and documentation between four or more systems, adding to KYC compliance burden. 

We often find that the front line (sales and servicing) and middle and back office (compliance and onboarding) are often at odds with each other. The front line is often frustrated, stuck between the client looking for an easier and better experience and their compliance colleagues looking for more information. Same Fenergo survey states that 36% of financial institutions claim to have lost prospective clients due to inefficient onboarding and KYC procedures.

Making even small advances in how clients rate their onboarding experience can have a big impact on future revenue, according to recent research by McKinsey & Company. McKinsey found that for every one-point increase in customer onboarding satisfaction on a 10- point Net Promoter Score (NPS) scale, there was a 3% increase in customer revenue.

Frequent regulatory changes meant that some clients who had previously been onboarded were no longer eligible for the product they had signed up for. These clients needed to be identified quickly.4

How effective is your organization at client onboarding? If you’re like most companies, there’s room for improvement.

The compliance industry has grown smartly, introducing technologies like Muinmos onboarding engine empowering customer onboarding is leveraging on innovative approaches to onboard effectively and compliantly, revolutionising the onboarding process flow. 

With help from integrated technologies, the front office team can complete standard client due diligence that does not require specialist knowledge, allowing to conclude whether the client ca be offered the products and services, meeting the regulatory requirements. The real time client data can flow directly to Compliance, focusing on high risk, Enhanced CDD assessments that require their skills and experience.

The technology has become deeply rooted in response mechanisms, leading many to feel that onboarding technology will enable the FIs to avoid breaching their regulatory KYC and AML compliance obligations while allowing for a better, smarter positioning with demonstrated potential increase in revenues. 

2. What can and needs to be done differently?

Silo-ed operational models are threatening the efficiency of compliance efforts. We recommend to consider following 3 actions:

  1. Optimise Client Data flow, particularly vital if onboarding across a number of jurisdictions
  2. Streamline KYC onboardingconsider client categorisation and suitability assessment when performing obligatory AML/KYC checks during your Client Due Diligence.
  3. Transparency: onboarding and client monitoring visibility across the enterprise, in Singapore and / or in any other jurisdiction your multi international group has presence and business operations.

Building integration on an API framework compliments straight through processing, managing the AML/CFT and KYC risk by exception. It allows customer direct pre-populating, merging and analysing data across all three lines of defence. 

For more information on the benefits of ingratiating onboarding technology please get in touch with us on Contact page.