The challenge of creating truly great client onboarding experiences is all too easy to underestimate for institutional banks. We outline the challenges and three key principles to streamline and enhance this critical task.

Onboarding processes can be time-consuming and inefficient for not only the customer but also onboarding teams. From CRM systems to KYC to various workflow tools and portals, many companies use multiple tools for customer onboarding highlighting that onboarding is not a simple process. Banks are not unaware of these issues and are continually spending vast sums of money on onboarding transformations – however, many have struggled to realize the full value from these initiatives. 

This is due to five key challenges:

1. Difficulties being truly client-centric. Challenger banks and fintechs have benefited from ingrained client-centric cultures from the outset, which in turn has allowed them to incorporate smooth onboarding experiences as part of their overall value proposition. Established banks, on the other hand, often struggle to overcome internal hurdles preventing them from being truly client-centric in their decision making and actions.
   
2. Internal resistance to change. The client onboarding process is a complex one involving multiple activities from prospecting, business approvals, KYC, legal, tax credit, regulations, account and product set-up. Difficulties in getting alignment and buy-in from across all these (often siloed) groups can hamper transformation initiatives and jeopardize them achieving their goals.
   
3. Difficulties with data. A lack of control over how data is collected and managed directly impacts both the client experience as well as operational efficiencies. Scattered across organizational silos, data is often missing, duplicated, unstructured, or conflicting, requiring additional effort by employees to track down or interpret that data. Additionally, banks are often fail to leverage data they already have on file for a client, again making the onboarding process more cumbersome than necessary.
   
4. Legacy IT infrastructure. Outdated technology platforms typically struggle to cater to the latest customer needs and expectations around functionality and transparency. Additionally, inflexible IT ecosystems – which are often dominated by a single supplier – make integration of new capabilities difficult.
   
5. Legal and policy complexity. KYC and other onboarding related policies are constantly evolving, and these policy changes are often not reflected in downstream systems and processes. Risk-averse policies and decision making can also hinder new capabilities such as automation and artificial intelligence from being fully leveraged to improve the onboarding experience.
   

Principles for impactful onboarding

 
Below we set out three key guiding principles for financial institutions seeking to transform client onboarding. 

Principle 1: Client experience improvements

Enable self-service – Creating a digital self-service channel that streamlines bank-client interactions via a centralized workflow connecting internal systems, employees, and clients will minimize a reliance on emails and increase transparency. To accelerate time to value, low-code/no-code platforms can be used to quickly stand up an application that provides a modernized interface while also integrating with legacy systems.

Capture information dynamically – By rationalizing question sets when initiating a case, the initial burden on clients can be minimized to reduce the incidence of early dropouts. This can be achieved by eliminating questions that are not used in decision-making and then tailoring any follow-up questions in real-time based on conditional logic.

Paperless execution – Exchanging documents and conducting negotiations via email can be tedious, confusing, and leaves room for security vulnerabilities. Implementing paperless execution using electronic signatures (e.g. DocuSign) will ensure a better client experience and reduce the risk that adjustments to agreements are lost during the process. 

Principle 2: Data & technology enhancements

Leverage existing data – Given that many clients are already doing business with the bank, minimize the burden on them by automatically checking for client data already on file before asking the client to provide (duplicate) information. Reuse data across the end-to-end process, leveraging trusted internal and external sources, with a view to eliminating manual, repetitive and inefficient steps.

Automate data entry and validation – Reduce turnaround time and errors arising from manual data entry by automating the movement of data to, from and between internal and external systems. This can include automating the extraction and/or normalization of unstructured data using machine learning, OCR, natural language processing, and other AI and automation tools.

Document rules engine – Implement a dynamic rules engine to determine what data and documents are needed from a client in a systematic fashion, based on client need and available data. Use machine learning and/or computer vision to review, validate, classify, and index documents.

Principle 3: Change Management

Design for flexibility & modularity – Deliver technology change incrementally rather than attempting to replace existing solutions all at once. Benefits can be quickly realized via pilot or MVP releases, which are subsequently refined and expanded based on business and client feedback.

Integrate frontline and servicing teams – Create a single ‘point of truth’ and an integrated workflow for onboarding progress that is accessible by the client as well as frontline, servicing & operations teams. This allows manual inquiry processes and email to be replaced by timely and accurate interactions between the relevant teams.

These principles should underpin a robust framework that facilitates a streamlined onboarding journey that mitigates risk, prioritizes client experience, embraces data and technology enhancements, and effectively manages change scenarios.

Has your bank identified these onboarding challenges? Are you ready to transform your client onboarding and unlock significant benefits? Capco understands the complexities of legacy systems, siloed data, and internal resistance to change. Our team of experts can help you develop and implement a tailored onboarding strategy that addresses your specific needs. Reach out for more insights and personalized recommendations tailored to your institution's needs:

Onboarding process assessment: We will analyze your current onboarding journey and identify areas for improvement.

Client-centric design: We will help you design an onboarding experience that prioritizes client needs and satisfaction.

Data & technology solutions: We will leverage automation, data integration, and advanced tools to streamline your process.

Change management expertise: We will guide you through the change process to ensure successful implementation and user adoption.