Community
In my last blog, we explored the 3 core client lifecycle challenges facing wealth managers – regulatory compliance, operational and technological challenges and client experience impacts. Considering these challenges, it’s plain to see that the HNWI client lifecycle management process is crying out to be digitized.
But what does digitizing the client lifecycle management process look like?
Well, firstly, it’s important to realize that not everything needs to be digitized. Automation should focus on the key pain-points that can alleviate pressure from the firm or their clients, introduce consistency and efficiencies to processes and can offer most return on investment.
By digitizing the Client Lifecycle process, wealth firms can ensure compliance with multiple regulations, increase efficiencies, decrease operational costs and provide a better client experience. Making the service experience as efficient and smooth as possible requires rethinking existing processes and practices, and embracing a transformational approach to managing client onboarding, regulatory compliance, client data and documentation, and client lifecycle events that can add most differentiation of service and introduce cost-efficiencies.
There are three main areas in which the private banking / wealth management client lifecycle can be digitalized:
1. Digitalizing Regulatory Compliance with a Rules-Driven, Risk-Based Approach
Private banks and wealth management firms are under increasing regulatory pressure to comply with all global and local regulations and ensure:
Here’s a quick summary of what can be digitized to achieve the compliance obligations, efficiencies and cost-effectiveness required:
2. Effective Data & Document Management – Rethinking the Data
The ability to achieve a high and consistent standard of compliance with multiple regulations is heavily dependent on the quality of client data available to the bank / wealth firm. It is the data and availability of documentation that enables the firm to build and assess a client’s risk profile and is the sole determinant of whether the bank can legitimately do business with the client without inviting undue risk to the firm. Every decision to engage in a relationship with a new client or a deeper relationship with an existing client needs to be underpinned by up-to-date and validated data and paperwork.
However, given the fragmented technology and siloed data make-up that characterizes most private banks / wealth firms, there is a need to rethink the end-to-end data and document management processes - from data/document capture, integration, processing, validation and distribution.
There are four aspects to this:
3. Digitizing Onboarding Workflows
The client onboarding process very often gets the sole blame for a poor and lengthy client onboarding experience, even though regulatory compliance, lack of data readiness and siloed processes and technologies are more likely the real culprits.
Having said this, client onboarding is not entirely blameless. Client onboarding is the closest ‘service’ to clients, bookending the entire process from initial client request to open an account to onboarding the client. Given that client onboarding spans many different functional, business and, potentially, jurisdictional lines, there are many different parties involved in the process - Relationship Manager, Compliance, Credit, Legal, Tech & Operations. Each of these stages represents a potential bottleneck – an opportunity for the client onboarding application to stall for an unnecessary length of time, hampered by a lack of cross-functional visibility into a client’s application and where it is in the process.
To achieve an efficient client onboarding process, here’s what we suggest:
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Alexander Boehm Chief Executive Officer at PayRate42
05 September
Alexander Saleh Head of Partnerships at Coincover
02 September
Alex Kreger Founder & CEO at UXDA
Welcome to Finextra. We use cookies to help us to deliver our services. You may change your preferences at our Cookie Centre.
Please read our Privacy Policy.