How Asset Servicers & Fund Managers Can Transform the Investor Experience

July 2, 2024

Stephen Florence

On 30th May 2024, Fenergo partnered with Funds Europe to host an expert panel discussion on the topic of digitalization in client and investor onboarding, and how asset servicers and fund managers can scale competitively.

Our panel included:

Phill Loveridge - Associate Director of AML, Aztec Group

Julien Ganter - Partner, Arendt Regulatory & Consulting

Richard Rae - Senior Manager of Transitions, Demand & Design, abrdn

Tara Kane - Product Manager for Asset Servicing, Fenergo

Nicholas Pratt - Technology & Operations Editor, Funds Europe (moderator)

The full webinar is available to watch on-demand, but we’ve summarized some of the key insights from our panel of experts below.

The Onboarding Challenge

Despite advancements in technology, many asset servicing and asset management firms still rely heavily on manual processes to manage investor onboarding and ongoing lifecycle management. Richard Rae observed that the current onboarding experience involves too many touchpoints, with internal teams spending excessive time on back-and-forth emails, paper forms and faxes, instead of focusing their resources on more value-added tasks.

A live audience poll during the webinar revealed that, 50% of firms believe manual processes and fragmented workflows are the biggest impediment to efficient investor onboarding, followed by legacy tech/a lack of digital solutions (30%).

When asked if the onboarding experience has been neglected by asset servicing firms, all participants disagreed but agreed that there’s a lot of work that needs to be done.

Tara Kane highlighted that while technology has greatly improved the onboarding process, new regulations often force firms to revert to manual processes if they are unprepared, hindering progress and disrupting their operating model.

The Modern Investor's Expectations

There is an increasing demand for personalized, streamlined onboarding experiences.

Phill Loveridge emphasized the necessity of digital solutions: "There’s no reason that onboarding needs to be difficult or take a long time. It’s not mandatory to have a digital offering but it’s a missed opportunity not to."

A key frustration for investors is getting to market quickly – by using technology, firms can get to market quicker with the right products, and this will undoubtedly help improve the investor experience.

Regulatory Challenges and Opportunities

Firms face increasing regulatory requirements, which add complexity to the onboarding process due to more thorough due diligence and data collection. This prioritization of compliance often comes at the expense of the investor experience. Julien Ganter noted that asset servicing and asset management firms often focus a lot of time and resources on understanding regulatory obligations and making sure they are fully compliant, however the investor experience can in turn be overlooked.

In order to balance compliance obligations with facilitating a smooth onboarding experience, firms must turn to technology partners to streamline processes.

Exploring a Single Investor Experience

Re-onboarding the same investors multiple times is a significant inefficiency. Creating a single investor profile can greatly benefit both investors and firms by reducing redundant requests and streamlining processes. According to Phill Loveridge, “about 40% of our investors invest across multiple fund managers.”

Tara Kane observed: "There is indeed an appetite in the industry for a shared investor repository to simplify the onboarding process by reducing unnecessary outreach, duplicated effort and requests for documentation."

The Role of AI

AI is transforming the onboarding process by simplifying and automating tasks, thus saving resources and improving data quality. However, it is essential to ensure AI governance to maintain transparency and compliance.

AI needs to be transparent and fully auditable – making sure it's in line with evolving regulations is essential. Our panellists noted that although AI can bring huge benefits to financial institutions and take away some of the heavy lifting, manual steps will still be required in order to maintain governance.