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Client Onboarding: Effectively Managing the Client Lifecycle
The document discusses choosing an automated client onboarding solution. It recommends buying rather than building a solution, as building in-house often costs more than expected. When choosing a solution, firms should consider whether it will be SaaS-based or on-site, how to integrate it with back-office systems, and whether it allows for configuration and incremental growth. Mobile and e-signature capabilities are also important to meet client needs and drive efficiencies. Automating high-volume account types first provides the best return on investment.
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Client Onboarding: Effectively Managing the Client Lifecycle
- 1. A Roadmap toClient Onboarding Success Growing Your Onboarding Process & Going Paperless
- 2. Agenda 1. Choosing anonboarding solution – Buy vs. build – selecting an approach – What will it need to do? A comprehensive checklist – Where should it reside – SaaS vs. Onsite? 2. Paperless account opening 3. Getting started – what to automate first? 4. How is incremental growth best achieved?
- 3. Leading serviceprovider to wealth management firms Founded in 1999 4 locations, 100+ staff Products and Services: Automated Client Onboarding Statement/Confirm Processing ePresentment Tax Form Processing Enterprise Risk Management Doxim Inc.
- 4. Client On-boarding Beyondaccount opening Opportunity - engage and grow new customers without increasing expense A focus on customer experience
- 5. Why Does itMatter? During on-boarding, customers and assets are in motion Customers most receptive to cross-sell during this period Market driver – differentiate yourself with “Customer Forward Thinking” * Harland Clarke Financial Industry Studies (2011)
- 6. Deloitte, 2012 “Growing Painsin Wealth Mgmt & Private Banking” 6
- 7. Deloitte, 2012 “Growing Painsin Wealth Mgmt & Private Banking”
- 8. Aite Group, Sep-2012 “AccountOpening Pain Points in the Front Office”
- 9. Forrester Research, Apr-2009 “BestPractices: Customer Onboarding”
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- 11. Buy vs. Build •As firms with large IT departments approach onboarding automation, the “buy vs. build” discussion often starts • In our experience, building onboarding solutions in-house always costs more than budgeted, even for firms with enormous coding resources
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- 13. And behind thescenes… • Client onboarding is complex, detailed and constantly evolving. For most financial services firms, it involves 300-600 questions, 5-10 workflows, 30-150 documents and 200-300 business rules. • All of these need changing as new products are introduced, new regulations are imposed and organizational changes occur such as mergers and acquisitions occur. • Too often, firms do not accurately define their business processes and operating model first
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- 15. Utopian Solution • Fullautomation when following “The Protocol”: request out for investor approval, prepopulate assets for acct transfer, investor approves, transfer • Uniform agreements and paperwork regardless of custodian and only display relevant disclosures and only display the disclosures once. • Immediate approval of investor and all accounts • Paperless • Business intelligence built into system for upselling and suitability • Comprehensive package with one signature regardless if assets held away • eSignature accepted by all parties • Transparency into account opening status for all parties (investors and advisors) for all accounts including assets held away • Lower costs: No duplicate data entry, no NIGOs, drive adoption of electronic delivery • Better controls than manual processes • Data and analytics generated from system to better understand investor buying patterns.
- 16. How do youdecide where to start? • The recommendation is always to start where you will realize your best ROI – and use that ROI to fund expansions of the project. • So, as part of your process analysis/ROI study, you’ll identify your most-used account types, and automate those first. • As you progress, you may find that you have account types that are never used, and you can streamline your processes accordingly. If you automate everything up front vs. incrementally, you miss the opportunity to discover these improvements
- 17. Onboarding Automation 1. Offera robust rules engine behind the scenes which automates complex decision processes and mandates compliance with enterprise-wide best practises 2. Offer connectivity to document management and imaging solutions 3. Be able to work with eSignature, as there’s a movement towards acceptance of that technology in the field
- 18. Going Paperless • Increasingly,e-Signature support is becoming part of onboarding offerings across the industry. • The reason for this? Increased comfort levels with paperless account opening, an increased interest in mobile technologies, and a clearer understanding in the industry of the regulations which govern eSignature adoption.
- 19. eSignature Drivers 1. COST– Physical paper handling is expensive, from the mailing costs, through the sorting costs, image capture costs and eventual archiving. 2. SPEED -Paper handling is slow. Waiting for the mail or even printing/signing/faxing is slower than just a few extra clicks. 3. CONVENIENCE - By enabling eSignature you can have an entirely digital straight through process. This is particularly appealing for investment advisors who visit clients. They no longer have to lug around an inkjet printer for example.
- 20. Onboarding Automation 4. Integrateseamlessly with your back office. 5. Provide access to the onboarding application through multiple channels in real-time, securely 6. Allow you to easily control changes to forms, questions, business rules, workflow 7. Offer a flexible delivery model - installed on your premises or SaaS
- 21. SaaS or Onsite?Things to Weigh SaaS OnSite Cost Pay as you go, per user, per month, etc. Up-front capital costs for hardware and software licensing. Customization Limited customization through service provider Fully customizable onboarding. Hardware Hardware and software reside at provider site Customer must provide hardware and system platforms to run onboarding platform. Security Access to SaaS applications is via Internet. Security must be carefully managed. Lower security risk because of on-premises secured location* Control SaaS provider controls systems and is entrusted with access to customer data System control resides with your onsite team.
- 22. Back Office Integration •The problem? Data held in silos can impair a complete view of the customer. • Increasing suitability and risk assessment requirements may mean you need to look at a bunch of data to determine suitability.
- 23. Back Office Integration Thesolutions: – Unifying KYC data collection and client onboarding to give a complete view of customer – Storage and reuse of customer data – requires bidirectional access to back office applications
- 24. Why Configuration Matters •Usually, with an onboarding application, there are four things which need to be modified: 1. Forms 2. Workflows 3. Rules 4. Questionnaires • An application which permits your team to configure and reconfigure these will save you a tremendous amount over the lifetime of your onboarding solution • Imagine your business analysts being able to add a question to your onboarding process through a GUI, not hard coding.
- 25. Mobile Banking Explosion •Javelin Research indicates that mobile banking gained 10 million new users in 2012 and currently reaches one- third of the mobile adult U.S. population. • 1 in 6 customers switching banks say a poor mobile banking experience prompted them to shop for a new bank • Online brokerages are increasingly offering mobile services for DIY investors, and full-service brokerages are looking for ways to incorporate mobile technologies into their onboarding processes without losing the personal broker/client relationship which sets them apart. (Javelin Research Report “2012 MOBILE BANKING, SMARTPHONE, AND TABLET FORECAST: Mobile Banking Gains 10 Million Users as Smartphone and Tablet Adoption Soars)
- 26. Mobile Client Onboarding Drivers: •Inefficient account opening process • High error rate • Need to attract younger tech savvy customers • Need to meet clients remotely and process account securely without carrying piles of paper
- 27. Mobile Client Onboarding Benefits: •Eliminate the need for the advisor to obtain an ink signature from the client via e-signature • Easy image capture of ID via tablet prevents transcription errors • Complete account opens in one visit, dramatically reducing abandonment rates • Perform end-to-end digital account opening, eliminating the need for paper-based forms. • Meet with clients at their home or place of business • Offer real-time, same-day client onboarding anywhere
- 28. Onboarding Automation 8. Offerreal-time reporting and event-driven notifications to dashboards and etc. 8. Do more than just account open – Business Process Management - any form, any workflow - to maximize ROI 9. Offer multi-language support - French/English, English/Spanish
- 29. KYC Updates – AnotherAutomation Target • Depending on firm maturity, our research suggests you do 100- 300% MORE KYC paperwork than account opening paperwork • KYC updates should be automated through the onboarding system to provide the same operational efficiencies and transparency which you experience during initial onboarding. • Early automation will allow you to be responsive to upcoming FATCA/IIROC regulations which mandate more KYC coverage. • Implement event-based KYC updates (noting that a client’s investment behaviour has changed and proactively contacting him or her) vs. just updating every 36 months
- 30. 30 Account Transfers • Ourquestionnaire takes the place of account transfer paperwork including government mandated forms • Once completed, all asset transfer information is captured, reducing representative’s need to “understand the paperwork requirements” for the Request for Transfer • No need to retrain employees on updated paperwork requirements should forms change • NIGO checks ensure the asset transfer forms are completed correctly and all documentation is present.
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- 32. Account Opening Costs •Manual, paper-based system - No scalability - Slow, time-consuming process - Duplicate data entry, high error rate - Low customer satisfaction • Inflexible proprietary system - $100,000 yearly updates - Long development lead time - Does not support the need to make changes quickly due to M&A, new regulations and products
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- 34. 34 Introducing OpenAdvantage® Configurable ClientManagement Platform • PDF forms and HTML questions supporting business rules, workflow and document generation • User interface enables configuration. No coding required • Understands data – not just form filling • Not just KYC, but understand your customer better • Experience with direct, managed accounts and clearing broker models • Integration with enterprise systems: - Back-office, CRM, e-signature
- 35. 35 Integrated E-Signature Readyto Go • Out-of-wallet questions used to confirm the identity of the signer - information based on light-touch credit check • Questions can be detailed or based on key metrics e.g. DOB, Driver’s License • Documents can be signed in multiple places (similar to initialing) • Process can be repeated by multiple signers each notified via e-mail • Once the document is signed customer is presented with list of completed documents for review
- 36. 36 • Improved customerexperience and increased sales • Speeds process and reduces costs – estimate 60% • Increases data accuracy for better compliance • Simple configuration and maintenance OpenAdvantage® Benefits
- 37. Some Concluding Thoughts •In choosing an onboarding solution, a very thorough needs analysis is crucial. • Onboarding is complex and constantly changing – your solution must keep pace • Consider what to automate first? How can incremental growth be achieved? How can I best get early ROI • Consider the role eSignature and mobile technologies may play in your onboarding in 5 years, and start to plan
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- 39. Connect With Us facebook.com/doxim @Doxim_Inc linkedin.com/company/doxim-inc. doxim.com/blog youtube.com/doximTV www.doxim.com Phone:1-866-475-9876 Email: webinar@doxim.com
Editor's Notes
- #2 Good Afternoon everyone! Welcome to today’s webinar; “A roadmap to client onboarding success”Now for those of you who are new to Doxim webinars we kindly ask that you submit any questions or comments through the chat/comment box at the bottom of the gotowebinar user interface.And as a reminder we will be sending our an email tomorrow with a link to the ondemand recording of the webinar for you to view and share at your convenience.Now Im excited to have Adam Zimmer as our presenter for todays webinar. Adam is the V.P. of R&D and Chief Technology Officer at Doxim. Adam joined Doxim in 2012, following Doxim’s acquisition of Arius Software. Adam originally founded Arius Software while he was studying at the University of Waterloo. Following a number of consulting engagements with financial customers he identified a gap in the market for a client on-boarding application that would help streamline and automate the gathering of high quality client data; Doxim Account Opening was born to address this need.Before I pass things over to adam I’d like to get a level set on what we’ll be covering in today’s webinar
- #3 In todays webinar we will be covering off several key topics all centered on the subject of client onboarding.Well start by introducing the concept of client onboarding then proceed to cover some of things you’ll need to consider when choosing an onboarding solution and then dive into paperless account opening best practices, and speak to where to get started and how to create quick wins to ensure a healthy ROI. And finally we close things off with a brief explanation of our onboarding solution, Doxim OpenAdvantage. At that point we’ll answer any questions that you might have about any of the material presented today or anything regarding client onboarding in general.Now without further ado Adam the floor is yours….
- #4 Sure no problem Dan, but before we get into the webinar content I’d like to take a moment to give a brief introduction about Doxim as some of you may not be familiar with who we are and what we do.
- #5 What is client onboarding? It is most commonly defined as the first 90-120 days of a client’s life cycle with your firm, though some research groups identify it as the first full year of the client’s involvement with your firm. It is a time of unique opportunity to build engagement and loyalty and to encourage clients to purchase additional products from your firm.If you attended our 101 course, you are familiar with the argument FOR onboarding automation, but perhaps you are wondering about the nuts and bolts – how to select a solution, what to automate first, how to plan for regulatory change.
- #6 According to Pitney Bowes, nearly 75% of all cross-sell opportunities occur within the first 90 days. Beyond this point the customer’s lifetime value and profitability will have been practically set in stone
- #7 Deloitte researched the biggest pain points in wealth management and private banking and discovered that 81% of wealthy clients value service quality as the most valuable attribute when selecting their investment firm/financial advisor. <Go to next slide.>
- #8 In Deloitte’s research of what “service quality” means to wealthy clients, they quickly honed in on some key service failures. Doxim should note that client onboarding was the top issue and also on the list were: integrated view of accounts, statements and client relationship management.Note: embedded ‘selling scripts’ and basic business intelligence would help with FA training.
- #10 Although this Forrester Research report is several years old, I really like this slide as it clearly depicts how certain new account opening processes are much easier than other processes.
- #11 In our last webinar, we discussed the phases of onboarding, from initial implementation of an account opening solution through planning for enterprise-wide analysis of client data and complex up-sell and cross sell. Today, we’d like to discuss some implementation-specific topics, which suppose that you’ve decided to take the plunge and automate your client onboarding. First topic here, then, is whether you should buy or build the solution you’ll use for this task. Even if you aren’t at this stage, it is a useful thought exercise to consider what your solution will need to look like. Too often in this field, we see people who have creating a limited solution, or one which cannot be easily configured and reconfigured. These look great out of the box, but within a couple of years they are dinosaurs, and the staff who initially applauded them hate working with them, as they haven’t kept pace with how business is actually done at your firm. POLL 1: How automated are your business processes at present?• Paper based and manual• Mix of paper and technology-based• Highly automatedOur expectation is than many of you will fall in the middle category – the trend in the industry is towards some automation, but people are still struggling with siloed data and applications which prohibit enterprise-wide automation of business processes like onboarding.
- #12 POLL 2: How often do you build applications for your firm in-house? Seldom, but it happens – depends on the scope of the projectOften – we have a talented technology team, and a bespoke solution is the best solutionNever – we don’t have the resources in-house for that, and prefer to partner with trusted vendorsThe graphic on the next page, from Aite Consulting, shows how complex wealth management onboarding can be , from a front-end perspective. Behind the scenes, the situation gets even more complex.
- #13 This image, from a presentation by Aite Group in 2010, shows just how complex wealth management onboarding can be from a front end perspective. This very complexity is what makes onboarding such a good target for automation, of course, but it also reminds us of the importance of proper development of scope and business cases up front.
- #14 Account opening which is about relationships, not formsClient-centric communications Right timeRight channelValue addSignatures and paperwork via esignature/email or wet signature/traditional formsImmediate personal response to client questions or concerns
- #15 These are some of the system needs that you need to address….
- #16 Most people realize that the technology exists to create a Utopian environment and it frustrates investors, advisors, as well as middle office operations and compliance, that there are so many disparate, manual and batch-related processes.
- #17 Research by Finextra Research Ltd., as cited in Aite Group’s reports on wealth management onboarding, suggests that major stumbling blocks in onboarding automation include “Predicting ROI and getting budget for process reengineeringProject”’ (13% reported this as their top concern, 33% as their second most important concern), and “Getting buy-in from all relevant entities in global financial group” (again, of those surveyed, (13% reported this as their top concern, 33% as their second most important concern). For this reason, firms often ask us how best to achieve early ROI and keep the onboarding project within scope early on. I know we’ve just discussed the complexities of what a fully implemented solution must involve, and that is perhaps daunting. But the secret here is incremental growth, and that means aiming for the low-hanging fruit first, then using early successes to drive the expansion of the project.
- #18 Whether you buy or build, your solution must include the following, or you will experience difficulty now or in the future.
- #19 Recently, we’ve seen several high profile banks and wealth management firms in Canada and the US roll out e-signature pilot programs, and their early success is very promising. With RBC and JP Morgan Chase amongst the recent headliners in the eSignature space, the time for eSignature seems to have finally arrived. Of course, as with any new technology, we need to highlight the need for good process architecture and audit trails when implementing e-signature technology, but then that’s already something you need to be thinking about when implementing client onboarding software – the two technologies work well in synergy with each other.
- #20 The benefits firms realize by implementing eSignature fall into the three buckets described above.
- #22 For onboarding, SaaS can be a great approach, and it is especially cost-effective for smaller to mid-sized firms who may be accessing onboarding services through a service provider like a clearing firm. Larger firms may elect to host their own solution on-site. The pros and cons of each approach are outlined here – as always, choosing between SaaS and Onsite is a matter of your business needs, and there is no “”one size fits all” recommendation to offer* But with an application like client onboarding, it is likely the platform need to be accessed by branch offices and mobile employees anyhow, so the difference here isn’t great. Either way, you’ll need robust security controls in place.
- #23 Why is back office integration such a focus here? Because for most financial service firms, there is no one system which contains all customer, product and account information. Instead, data is siloed in legacy systems. But with the increasing regulatory requirements around suitability assessment and KYC, there needs to be a way to get a 360 degree view of the customer. Onboarding software can provide that bridge, but only if it is robust and connected enough to work enterprise wide, and only if it can access the various components of the back office bi-directionally.
- #24 Why is back office integration such a focus here? Because for most financial service firms, there is no one system which contains all customer, product and account information. Instead, data is siloed in legacy systems. But with the increasing regulatory requirements around suitability assessment and KYC, there needs to be a way to get a 360 degree view of the customer. Onboarding software can provide that bridge, but only if it is robust and connected enough to work enterprise wide, and only if it can access the various components of the back office bi-directionally.
- #25 I’m sure you recollect earlier when we said that the average wealth management implementation of onboarding automation involves, it involves 300-600 questions, 5-10 workflows, 30-150 documents and 200-300 business rules. A thought exercise- how many of the new regulations you are watching will require a change to one of these four items? Consider the cost of modifying these internally vs though an engagement with a vendor.Regardless of your position on buy vs. build, you MUST be sure that the tools used to configure these items are intuitive and GUI based, or your system will date fast and cost hundreds of thousands of dollars to maintain and update.
- #30 For example, a client liquidating a number of assets may be undergoing a divorce or purchasing property – detecting these patterns and offering suitable financial advice both helps you maintain current client data and provides you with opportunities to offer meaningful product matches.In our “Client Onboarding 101” webinar we also discuss other natural targets for early automation, like asset transfers and client complaint management. And of course if you pick a flexible enough solution, you can use it to automate any process that requires a workflow and approval process, so you can also automate HR forms or other non-onboarding business processes. After all, if you are doing the work to select and implement the right solution, you might as well find out of the box ways to increase your ROI.
- #31 Firms often have twice the staff time devoted to transfers as they do to account opening
- #32 Onboarding automation can be quite cost effective, if you follow the best practises we’ve outlined today. Besides, it’s more expensive to open an account (price per account) and have that person become dissatisfied and leave. And regulatory compliance is a must have these days, with the radically increased fines being levied by FINRA and others. Onboarding automation can help mitigate your risk in that regard too. You’ll need to gather more data to meet increased regulatory imperatives – might as well use it!
- #33 As a final reminder, the alternatives to properly implemented onboarding automation are very expensive indeed. Account opening cost firms anywhere from $36 to $150 dollars per account. And when you consider the cost of rework on NIGO accounts, this number increases dramatically.Firms often try to implement their own solutions but these tend to be very expensive both upfront and to maintain on an ongoing basis.It’s not just the cost of buying the dog, it’s the vet bills.
- #34 We’ve discussed WHAT you might want to automate, how you might choose to evolve your automation strategy, and so on, so here’s a chance to show you some nuts and bolts of HOW that automation might take place, using our client onboarding tool. OpenAdvantage can support the initiatives described above. OA integrates seamlessly with your back office applications, becoming a key part of your Business Process Management initiatives and supporting the move towards intelligent, enterprise-wide onboarding.
- #37 POLL3: would you like to learn more about OpenAdvantage? Please select the response that best describes your level of interest
- #38 There is no need to boil the ocean, but you need to make sure you make the right pick up front, as an onboarding solution will act as an enterprise-wide bridge between your systems. Start small, pick the best bang for your buck, and then get creative in how you leverage your system for maximum ROI.
- #39 At this point, I’ll open it up to any questions that you’ve been asking during the webinar. Please keep the questions coming by simply submit them at in the chat box at the bottom of the GoToWebinar User Interface and we’ll try to answer as many as we can without going over the allotted time.First question….Q1: What's an example of a good first account type to automate?Q2: Have any big names implemented e-signature yet?Q3: How can you capture ID information using OA without paper?Q4: How will new regulations in the US and Canada impact account opening automation?Q5: What's the usual scope of a client onboarding automation project? Do most firms stage their onboarding automation, or do it all at once?
- #40 I’d like to thank for attending this webinar on “A roadmap to client onboarding success”. If you would like to learn more about Doxim you can visit our websitewww.doxim.com or simply contact us at webinar@doxim.com. In addition we’ve listed some of the other ways you can stay connected with Doxim and to keep abreast on the latest news, trends and developments impacting your industry. As a reminder we will be sending out a follow up email tomorrow with an on-demand recording of this webinar for you to view and share at your convenience. Thank you again and have a great day.