Evolving onboarding for Financial Institutions
Key steps to enhancing
client onboarding and
delivering an excellent client experience

The perception of poor client onboarding within established Financial Institutions hasn’t been helped by the fact that recent entrants to the Financial Sector – challenger banks, Neobanks and Crypto providers for example – have significantly changed the game when it comes to customer experience within financial services. These new players have pioneered quick, simple, customer-centric retail onboarding processes that can be completed in a matter of minutes. The impact of these changes is already being felt in more mainstream finance; why wouldn’t business owners expect the same experience with their business banking accounts as they do in their personal lives?

Simply put, those institutions with a simple, easy and quick onboarding process will have a significant commercial advantage over their rivals. With this in mind, what steps should Financial Institutions be taking to improve their client onboarding processes for their corporate customers? Al Catto, Managing Director at Beyond, shares his thoughts below.

Steps to success

Step 1: Understand customer expectations

Customers are becoming ever more sophisticated and at the commercial and institutional level the demands are particularly high. At a minimum, customers now expect the following from their banking relationships:

Speed & simplicity: It should be simple and straight forward to open, update and extend a banking relationship. The client should only be asked for the information that is required and they should only be asked once.

Accessibility: The client should be able to access their information and account details through the channel of their choosing or a mix of channels as they require. Customers do not expect to have to pick up the phone to talk to their bank on a regular basis.

Self-service: Particularly relevant in the corporate sector, clients expect to be able to shape their reporting so they can see their data in a way that helps them to take decisions, rather than working with an inflexible interface or being unable to extract data.

Personalised service: There is increasing demand for Financial Institutions to provide timely and relevant advice, marketing their products accurately and making offers, products and relevant services easily available to their customer base.

Relevant information requests: When setting up or updating customer information, retrieving data and documentation is now seen as the account providers’ issue. Customers expect Institutions to source public information and only to request relevant information that cannot be sourced elsewhere. Where information is required, customers also want this to be easy to provide – and if not, that they are offered help from their Institution.

Step 2: Create a successful strategy to drive benefits from a great customer experience

Once customer onboarding is acknowledged as a key driver of the client experience, it is critical to formulate a strategy that will support the delivery of targeted business benefits, one that must tackle 3 core components:

  • Customer experience
  • Efficiency & cost
  • Risk & compliance

It is essential to find the right balance between these 3 core levers, acknowledging that the balance is likely to be unique for each institution at a particular point in time.

The effort required to develop a winning strategy should not be underestimated, the most successful organisations in this space take a rigorous approach to developing a vision and roadmap which accurately articulates their goals or objectives and the benefits that they aim to achieve.

Once both goals and a high-level plan are in place, the organisation should focus on the Target Operating Model (TOM). This step will help to define the individual changes required to deliver the goals and deliver a successful transformation.

The economic benefits that can result from a structured and well executed customer experience transformation can be significant, primarily resulting from:

Reduced costs to serve: Driven by automation, streamlining of policy, tailored workflow and targeted client activities based on risk rating and client behaviour.

Increased revenues: Resulting from cross-selling, use of behavioural analytics to understand and service client needs, client retention and a general increase in the lifetime value of your customers.

The initiatives required to enhance the customer experience may also result in a number of additional operational benefits which may significantly improve the capabilities of your team and we touch on specific projects that might be prioritised in the sections below.

Step 3: Build solid foundations for your client onboarding operation

Before embarking on complex technical or technology led set of initiatives, it is critical that you ensure that the core foundations of a successful onboarding operation are in place and that the elements of the function include:

Policy lineage: Every organisation should be clear on the regulations that apply to their specific business, based on products, client types, jurisdiction etc. This will involve reviewing and aligning all relevant regulation with internal policy, business rules, risk rules down to the individual data points required and defining how and where these will be satisfied within the process flow.

Client due diligence baselines: Compliance is still paramount and it should be clear what data must be captured for each client type, before making changes to the process it must also be clear that the data held on file for all existing clients is comprehensive and correct.

Process and technology architecture: All established Financial Institutions will have an existing onboarding process and technology landscape; it is essential to ensure that this is well understood and the inefficiencies and issues within the existing process are clearly defined. Once this current state is understood it will be possible to identify specific technologies and process streamlining that will enhance the onboarding flow and ease the process for your customers.

Clear procedures: Policy and process are fundamental to a well-run operation, however these must be further supported by clear and transparent procedures which help your teams on the ground to take rapid and accurate decisions, aligned to regulation and policy.

With these foundations in place your organisation will be able to generate a comprehensive understanding of the existing onboarding process and identify specific areas for improvement.

Step 4: Accelerate transformation by choosing the right projects

Improving the onboarding experience to engage and satisfy your customers will require the initiation of projects to transform the business. It is critical to align your available resources to ensure you execute these initiatives efficiently and realise the benefits for the business in the form of increased revenue and cost efficiency. Ideally these benefits will be delivered incrementally over time, rather than all at the end of a long transformation journey. This helps to maintain momentum on the project by demonstrating value to the business throughout the exercise.

Choosing the right projects is always very context dependent, however we have outlined some potential areas of focus below:

Single view of the client: extract institutional data from individual silos and share this across departments. The ultimate aim is for every area of the organisation to refer to, update and maintain a single copy of the client data, ensuring entity resolution and enabling all functions to understand the full context of each client relationship.

Transaction monitoring / behavioural analytics: Observing the real-time activities of clients allows the identification of anomalous behaviour from a risk perspective, however this may also highlight critical points in the development of a client’s business, for example, the movement to a new jurisdiction, the opening of a new supply chain or the acquisition of a rival in a new market. These events are prefect opportunities for relationship managers to check in with clients, understand their needs and offer new products to aid their growth.

Perpetual KYC: As a result of AML 5, many organisations are seeking to implement perpetual or continuous methods to ensure that KYC and AML information is constantly refreshed and up to date across their entire client base.

Adopting PKYC can be truly transformative delivering significant ongoing efficiencies, however this is a complex and technical area requiring coordination across compliance, legal, operations and technology and any project in this space should be broken down into specific initiatives to deliver value over time.

Process automation: Having generated a deep understanding of the existing process, it will be possible to identify opportunities to impose rules and automate tasks to remove the need for continual manual intervention. There are several automation technologies which are currently used within the onboarding space and can be drive significant improvements in cost efficiency and speed of onboarding.

Chatbots and FAQs: Projects in this space can be developed independently of the internal process flows and deliver greatly increased customer engagement. The approach utilises machine learning and natural language processing to identify common customer questions and provide detailed answers directly to the client without the need for call centres.

Take action
Define a strategy
and invest effectively

To prevent being left behind in the battle for customer loyalty and the resulting revenues, Financial Institutions must now define a strategy to invest effectively in their customer onboarding functions and deliver tangible improvements in onboarding time and simplicity.

The development of an improved customer experience will undoubtedly require several steps. For any organisation embarking on this transformational journey, it will be essential to develop a clear vision and break the effort down into individual steps, or specific projects, such as those defined above with the aim of delivering incremental benefits over time.

At Beyond we have helped a number of financial institutions on their journey to achieve improved customer onboarding and enhance their customer experience. If you would like to hear more about our experience, or discuss some of the challenges you are currently facing, please contact us.

Read More