Emerging new technologies are revolutionizing how financial institutions conduct client onboarding procedures across their organizations. The drive towards digital transformation is led by the need to tackle the biggest operational challenges that financial institutions currently face along with carving out the future of the digital client journey.
Biggest challenges facing digital KYC and CLM
The biggest challenge facing the industry is the “client experience” in client onboarding and client lifecycle management. Clients find using current internal systems clunky and non-transparent from front to middle office. 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. A Fenergo survey showed that 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. The internal current process results in duplication of work and documents, delaying progress and delivering flat on ROI.
The future of client onboarding
Digitalization and automation are key. Automation of the client onboarding process will alleviate many pain points by increasing transparency across functions and technologies, enhancing visibility into client profiles (by centralizing data and documentation) and improving data quality and inter-institutional data sharing. There are many opportunities from the current systems that are in place in financial institutions today to deliver effective, seamless and optimal benefits for end users and the overall organization. Implementing a straight through automation system for processing cuts down on operational inefficiencies.
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 time by streamlining the process; and faster time to revenue;
- 20% reduction in audit-related costs through enforced processes with clear auditable records
This results in a win/win - a direct correlation of positive benefits for the client organization and their customers.
New technologies revolutionize KYC compliance
There are practical ways to implement new and emerging technologies. By joining the digital journey, financial institutions are embracing automation and removing manual processes currently in place. An example of this would be 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.
Download the Forrester report today to learn about The Time, Cost and Challenges of Client Onboarding