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The Future of Client Onboarding for Financial Institutions

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Emerging new technologies are revolutionizing how financial institutions conduct client onboarding procedures across their organizations. The drive towards digital transformation is led in equal parts by the need to tackle operational challenges, as well as the need to deliver digital client journeys that make for faster onboarding and more satisfied customers.

Biggest Challenges Facing Digital KYC and CLM

The biggest challenge facing the industry is the “client experience” in client onboarding and client lifecycle management. Despite its revenue-generating abilities, client onboarding remains an under-funded, technology-lagging, spreadsheet-driven process, built around siloed systems and data stacks that are incapable of connecting or representing a single view of the customer.

As a result, client onboarding teams are struggling to onboard new customers efficiently or profitably in compliance with new and ever-evolving regulations. A recent Fenergo survey claims that financial institutions are losing up to $10bn in revenue a year due to poor data management practices. This correlates with the research undertaken by Forrester and Fenergo a few years ago, which suggests that financial institutions must collect up to 100 pieces of data or documentation from clients to complete the onboarding process.

However, a poor centralized data management strategy and an inability to re-use existing customer data and documentation creates the necessity to perform client outreaches, further impacting the client experience.

The Future of Client Onboarding

Digitalization and automation are key for delivering an outstanding customer experience during client onboarding and client lifecycle management processes.  Automation can alleviate many pain points by increasing transparency across functions, business lines and jurisdictions, enhancing visibility into client profiles (by centralizing data and documentation) and improving data quality and cross-institutional data sharing. There are many opportunities to connect internal repositories to deliver a more effective, seamless and optimal benefits for customers and the overall organization. Implementing an automation system built around end-to-end straight through process reduces operational inefficiencies and streamlines the client journey from start to finish.

Clients also want to be self-sufficient. They need to be empowered with automation made simple, through self-service channels.

Fenergo clients gained the following benefits by automating the client onboarding process:

  • 20 % increase in operational efficiencies and productivity gains by the elimination of duplicative work and manual steps, and by re-assigning people to other tasks;
  • 30% reduction in onboarding times by streamlining the process; and faster time to revenue;
  • 20% reduction in audit-related costs through enforced processes with clear auditable records.

New Technologies Revolutionize KYC Compliance

There are practical ways to implement new and emerging technologies. By connecting the end-to-end digital client journey, financial institutions are finding new ways to enhance the automation of manual processes. For example, the use of Optical Character Recognition (OCR) to automate the consumption of data on documentation can significantly reduce operational inefficiencies. Furthermore, the introduction of eSignatures and electronic ID&V technologies help to create a more frictionless client journey that enhances the overall customer experience.

Building Towards a Digital CLM

Buy-in and communication are key to success with any digital implementation. Of course, this isn’t always an easy shift, but it is essential to bring all the different functional siloes together. To achieve success in the digital client journey, financial institutions need be realistic about where they are in the process, have a clear vision on where they are going and be pragmatic in achieving goals over a fixed timeframe.  

Once you show some early wins and get your full organization moving in the same direction, you can then build towards a final CLM solution.