Untangling the Spaghetti Junction: Digital Client Onboarding for Asset Managers and Asset Servicers

Despite the massive push for innovation and digitalization in the financial services industry, there are large gaps remaining for many Asset Managers and Asset Servicers. Manual processes such as spreadsheets and hard copies of data and documents are still common, which creates a significant burden for client onboarding and lifecycle management. In addition to the challenge of collecting and storing these documents, many firms face yet another hurdle when it comes to the sharing of information between departments. Data remains in siloes, making it near impossible for departments in the same organization to exchange information. This places the onus on the client to provide duplicate information, creating a break in the onboarding cycle and a negative overall experience for both the client and the employee of the firm. This disconnect between departments quickly becomes what is known as a spaghetti junction.

Time is Money

Manual processes don’t just clutter up the office. It adds a significant amount of time and frustration for both employees and the clients. However, the impact on the client experience does not end at the onboarding stage. The seismic ripple effect of a negative client experience impacts the trust they have in an institution and lessens the likelihood of cross-sell and up-sell opportunities. In essence, it pays to get it right the first time.

With a Client Lifecycle Management (CLM) solution, the spaghetti junction becomes untangled and settles into a hub and spoke model. Rather than dozens of independent entities and departments that struggle to communicate and share data transparently, the entities can feed into the hub—the CLM provider—as a central repository where they can exchange information seamlessly. Transparency and a 360 view of the client is the key to unlocking best practice for onboarding. In manual client onboarding the Asset Manager, the client, the custodian, and the broker may all benefit from the same information but don’t have access to it, creating a tangled web of siloed departments. Research by Fenergo found that a lack of cross-departmental collaboration is a key inhibitor to change. Transitioning to a streamlined digital hub and spoke model allows all parties involved to share and receive the information they need in an instant.

The Rising Tide of Regulations

One of the largest challenges in the onboarding process is compliance with regulatory obligations and performing KYC and AML checks. The regulatory tsunami that has occurred over the last ten years means that it takes more time and effort to check a client’s profile, which increases the time to onboard and open accounts, impacting the time to revenue and potentially resulting in revenue losses. As it stands, Asset Managers and Asset Servicers are spending far more than necessary to solve regulatory challenges and the onboarding of clients by brute force alone.

Fenergo’s Client Onboarding and Regulatory Compliance solutions help Asset Management and Asset Servicing firms to reduce the impact of manual data entry, helping to refocus resources on higher-value, client-centric activities. Up to 30% headcount savings on Client & Ops Management groups & 40% reduction in required IT overhead.

Fenergo delivers 80% reduction in regulatory change management cost by providing ongoing updates and access to our global regulatory community. This significantly reduces internal costs to interpret, implement and maintain regulatory changes, as well as perform KYC reviews. Overall, Asset Managers can hope to achieve up to 34% reduction in total audit cost savings with Fenergo (Forrester Research, 2015).

Client Experience: The New Battleground for Success

It’s becoming more and more clear that the client experience is the key success factor for financial institutions. How your brand is viewed, the trust your clients have, and how happy they are with your service is what keeps them coming back, and even opens up the door to referrals and up-sells. Investing in an excellent client experience will not only raise the bar for your brand reputation, but will yield returns in reduced client turnover, faster time to revenue, and allow your employees to focus on higher value adding tasks for the firm. Onboarding is not only the first step of a client journey; it is the foundation of a positive and lasting relationship.