Whether your products are credit cards, insurance policies, wealth management solutions or securities, client onboarding for financial services companies (including KYC/AML compliance obligations) can be a pain for all concerned. Below we quickly run through 5 key considerations for your client onboarding process. The list is high level, we could go into a lot of detail on each one and we may do on our next post… get our updates here.
User experience is particularly critical when it comes to onboarding clients. The shortest, most friction-free process is what you should be trying to achieve. Clients want to have their product purchased or account opened and begin ASAP. If you’re using PDFs and pens, make the forms flow well and don’t repeat questions. If using an online system, keep it neat, clean and easy to read and navigate.
On the back end, you need to be ‘staff-friendly’ also. Systems and process should be in place to get the right information from the client as quickly as possible, while remaining compliant. If the back office functions smoothly, this will translate to a better experience for the client, and happier back office staff.
- Build Relationships
Clients are not just numbers. Input as much effort to construct an on-going relationship as you can during the onboarding phase. Even if clients are interacting with you via online methods, give them a call and ask them as many open-ended questions as you can to learn about their preferences and needs.
Make notes! Interact, assist and understand. It’s all about building a bridge of trust that connects companies and clients. You only get 1 chance at a first impression. If you outsource your onboarding (to a Fund Administrator for example), make sure they are managing your clients expectations and are providing a good experience. Ask your client for feedback on this.
A positive client onboarding approach enables companies to gain goodwill and can have cost benefits. It can also lead to significantly reduced time to onboard customers through higher rate of interaction. This will result in enhanced customer satisfaction and works towards accelerating revenue realization.
- Keep your Records Up-to-date
The accuracy of the clients’ profile and records are vital in achieving the goals of your KYC/AML obligations. To protect yourself, periodic monitoring is crucial. Depending on the risk rating you give your clients (think PEP) you should be actively checking their status on a screening database or at least via online searches of related databases. These screenings may be take place yearly, semi-annually, quarterly, or in some cases, in real time. In addition, you need to make sure the information you have on your client is accurate with regard to reporting for FACTA, CRS etc.
Nobody wants to ‘bug’ their clients for more information, but if it’s required by a governing body, you will have to. Try make the process as simple and non-intrusive as possible.
- Avoid Inconsistencies
In order to run an efficient client onboarding and KYC programme, you need clearly defined processes and standards. If you can, try using technology to automate repetitive tasks and reduce room for error. Be careful though, you cannot automate everything. As much as the process can be seen as a box ticking exercise, humans are making crucial decisions that matter and the wrong decision can have severe ramifications.
Having processes for approvals (and rejections) at different levels of the business and tracking are important in avoiding inconsistencies. If you’re using PDF and pen, you should have a separate, digital system for tracking the process. Something as simple as Excel can help, but be careful when you try to scale this and have more than 1 person involved in the process.
Having good processes in place will minimise regulatory and compliance risk as well as the costs associated with achieving these conditions.
- Everyone on the Same Page
Depending on your business type, front-line staff are often the ones who bring risk into the business, so they should be aware of the KYC/AML guidelines at all times in order to protect the interests of the business. Any updates and changes should be communicated across departments as soon as possible, so everyone knows what’s happening. Insufficient communication between business departments may lead to inconsistent and unconsolidated data, which diminishes the trustworthiness and reliability of the data and can leave you exposed.
There should be clear, open communication channels between all levels of the business and readily available resources that all staff can access. Also consider relevant training and where applicable, continual professional development.
The above list is a high level overview of some key considerations for your client onboarding process. If you’d like to learn how we create great digital experiences for your clients, reduce onboarding times and remove risk form your business, please contact us for a discussion.
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