Transparency and data quality problems hurting banks’ abilities to comply with regulations and improve customer experience

10 April 2013 – London, UK – New research by Fenergo and Knowledgent reveals that financial institutions are struggling to onboard new clients efficiently or profitably in compliance with new and evolving regulations due to disjointed and siloed data, technologies and departments.

The whitepaper, Client Onboarding: Solving the Challenges, Maximising the Opportunities, is based on research conducted among 17 top tier financial institutions spanning institutional sales and trading, wealth management, asset management, retail, private banking and prime brokerage.

The survey findings reveal a host of issues arising from an ever-evolving regulatory market, coupled with a lack of transparency, visibility and poor data quality, showing that:

• Almost 70% of financial institutions rank “lack of single cross reference to link clients, accounts and documents” as first or second in severity
• 64% claim that siloed systems and lack of consistent cross-reference IDs was a common pain point, with many using numerous tools to access and verify client information
• 54% cite the changing regulatory environment as a major concern, preventing the onboarding process from adapting and implementing new rules quickly and efficiently.

According to Marc Murphy, Fenergo’s CEO, leaders in enterprise Customer Lifecycle Management software solutions for financial institutions, “We undertook this survey to get a pulse-on-the-market view of client onboarding. Despite its revenue-generating abilities, client onboarding remains an under-funded, technology-lagging, spreadsheet-driven process. As a result, onboarding teams are struggling to onboard new clients efficiently or profitably in compliance with new and ever-evolving regulations”.

The results reveal that client experience is a particularly painful area for client onboarding with:

• 47% citing the lack of a client onboarding tool as a key impediment to improving client experience
• 40% claiming that fragmented communications and repeated information requests were souring clients’ onboarding journeys
• 33% stating that lack of transparency across documents is causing negative reactions to client onboarding.

“Taking a closer look at the results,” says James Follett, Client Onboarding Practice Lead with Knowledgent, a leader in advanced information management and analytical solutions for financial services, “we see that most of the issues are interlinked, arising from a few underlying core challenges. Automation of the client onboarding function can help to cure many of these pain points by increasing transparency across functions and technologies, enhancing visibility into client profiles (including data and documentation) and improving data quality and inter-institutional data sharing.”

Murphy adds:

“Regulations like Dodd-Frank, EMIR and MiFID II aim to tackle issues around transparency, visibility and data quality. By implementing an enterprise platform that combines counterparty data management, client onboarding lifecycle and compliance management, institutions can efficiently meet their regulatory compliance obligations, improve client experience, generate new revenues and cut costs by optimising operational efficiencies”.

Fenergo