• Bo McCarty and Justin Hoffer
  • Published: 06 December 2021

Client onboarding experiences set the tone for the relationship between the client and their new financial institution. Clients have been sold on process efficiencies, and cohesiveness and financial institutions must deliver upon these key points as clients have minimum expectations. 

Traditionally, onboarding has proven to be a pain point for financial entities and their clients; however, with investments in an application programming interface (API), artificial intelligence (AI) and the digitization of onboarding teams, financial entities can streamline processes and offer clients better services and practices to alleviate pain points and cumbersome processes. 

Bottlenecks typically occur during onboarding due to manually intensive and inefficient processes, as well as burdensome due diligence requirements. Onboarding teams are stretched thin when addressing regulatory obligations, such as Know Your Customer (KYC) and Customer Identification Program (CIP), and meeting core business requirements. This can cause the client relationship to get off to an unsteady start and ultimately slows fee generation as products and services implementation is delayed. In addition, the service and implementation team’s remediation and backlog queue grow, and disgruntled clients ask for additional workarounds and updates creating a difficult working environment. 

Onboarding teams can find themselves underwater as the pressure to catch up mounts, often leading to attrition as employees look to other institutions that have a more agile onboarding process. The question many financial institutions face is how to avoid these pitfalls, and a pre-emptive approach involves streamlining and digitizing the onboarding process.

Most onboarding procedures are laborious and antiquated, and often there is a lack of transparency and reliance on outdated and manually intensive systems. To better serve commercial clients and employees, financial institutions must focus on internal technology integration as clients continuously expect this. 

Up until this point, priorities for financial institutions have been on technology’s benefit to help clients move and receive funds more efficiently. Financial institutions need to consider technological investments in areas that may be low volume, but directly affect a client’s perception of ‘ease of doing business,’ e.g., the onboarding process. 

Understanding client needs, listening to employee feedback, and knowing end-to-end bank operations-optics present an opportunity to modernize an outdated process. Clients expect transparency and employees want to provide it without having to answer the telephone or return an email. This can be achieved by leveraging advancements in the digital space through the incorporation of artificial intelligence and an API that link disparate banking systems into client facing portals.

Onboarding dashboards could be positioned to act as both a secure medium to exchange sensitive documents and to serve as a communication tool with clients. Digital dashboards, at a minimum, could guide workflows, documentation collection, and set training appointments for staff. This tool helps advance clients and bank staff through the onboarding process while providing status and message alerts at each critical point, enabling the client to provide feedback and receive real-time answers.  

The integration of an API will allow for different legs of the onboarding process to linchpin with each other and connect processes that have previously proved problematic. With continued integration of paperless documents, the benefits of AI and an API can be fully realized – with the potential to extract data and electronically complete required KYC and OFAC documents, streamlining the digital process. Dashboards would allow also financial institutions to offer self service capabilities that enable clients to initiate and track onboarding activities.

Digital onboarding is mandatory for financial institutions as clients have grown to expect it. Digitization provides the foundation in which sophisticated capabilities, such as AI and API, can be leveraged. 

AI, for example, can support complex data extractions through natural language processing (NLP), which can systematically extract sensitive tax information from a clients’ W-8 or W-9 – automating data entry into different banking directory systems and mitigating downstream errors. Further, information is traditionally siloed within different department groups and can be lost within the confines of the banking organization. 

Clients will often get frustrated for duplicative document uploads and interdepartmental relationships get strained as email traffic and document requests build-up. Without a central repository leveraging an API to connect information siloes, financial services companies will be saddled with inefficient processes and provide sub-optimal experiences and even face difficulties garnering new business. 

Digital signatures, digital document management, live chat, and video conferencing are all capabilities that should be utilized to optimize the onboarding experience. Integration of these capabilities can cause initial pain points; however, the proper adoption can thoroughly enhance the client experience. A fully digitized onboarding process with the potential assistance of third parties may flow in a manner as portrayed below: 

Digital capabilities must exceed expectations at financial organizations to enhance the client onboarding experience. This must be grounded with an understanding of current processes and the associated pain points for clients and employees alike. Then, the institutions need to segment their customers and define bespoke, target state journeys for each segment. These steps are essential to guiding how technologies should be leveraged to support the desired digital experience. Financial institutions must act on the opportunity to transform their cumbersome onboarding processes into a value driver that espouses growth, efficiency, and improved experiences.


To learn more, reach out to the following at Capco:

Lane Martin, Partner

Burt Yeo, Managing Principal

Justin Hoffer, Senior Consultant

Michael Hill, Senior Consultant

Bo McCarty, Consultant