In recent years, the investment advice and wealth management industry has begun to face increasing cost pressures. Self-service and direct-to-consumer platforms continue to expand and are particularly attractive to a new generation of investors whose expectations have been shaped by the latest technology and who hold clear beliefs about how their investment experience should be.

It is not just the customer facing technology that matters – the experience that investors have depends not only on their interaction with the company but the efficiency of the internal processes that support each step of their client journey.  Increasing cost pressures mean that firms need to look holistically at back-office process efficiency and client facing engagement – and the impact each has on the other.

Where are the opportunities for improvement?

Client onboarding

As your potential client’s first insight into what they might expect when partnering with you to invest, onboarding can positively – or negatively – influence the conversion ratio of potential clients into real clients.  Large amounts of money, multiple accounts and/or geographically dispersed assets are common and do add greater complexity; however, these dynamics do not change the fact that the process is time-critical and can make or break the client relationship.

Customer centricity is recognised as the most important characteristic for a firm targeting high-net worth clients. 1

Reducing overall process complexity

During a time in which investment services are being rapidly commoditised and consumers are accustomed to the ‘instant’ gratification’ of online vendor relationships, the onboarding process is ideal for improvement to differentiate service offering.

According to a recent report, it takes approximately 41 days for a wealth management firm to onboard a high-net worth client.2

One issue is that the onboarding process is still largely manual and labour intensive. Once the necessary forms are complete, they must be sent to the client, likely in paper format or, if sent as a pdf, then the client must print, sign and return.  This creates an enormous gulf between the type of service available at the firm and modern investment expectations in the digital age.

Moreover, no matter how skilled you may be or how well the first meeting went, you lose control of the process the moment that first meeting finishes.  The biggest barrier to winning new business is that many potential clients will simply forget to ‘follow-up’. And the more complex the initial account opening process is for the client, the more likely the client is to become frustrated and overwhelmed and, ultimately, abandon the process entirely.

Wealth management firms must ensure that the onboarding experience and core process steps are consistent across channels, whether via web, mobile, email, phone, in person, etc… Your customers also want to know where they stand in the onboarding process via real-time personalised communication.  They seek to have as much visibility as possible, from account approval status to updates on investment activities and performance.

Consider the following scenario: a wealth management or advisory firm charges using a recurring bps (basis point) structure and aims to onboard 250 clients (individuals or corporations) per year.  Allowing for meetings, form filling, KYC/AML checks and the manual process of getting information from paper format into the firm’s internal systems, the process typically takes four weeks.  This amounts to more than 1,000 weeks of missed fees per year, or to put that into a different context, over 20 years’ worth of lost charges per year, every year. 

Using technology to reduce the time taken to onboard clients, whilst ensuring a compliant process, can provide substantial benefits.

Regulatory Compliance Requirements

Tighter regulations designed to protect consumers and curb fraud have resulted in stringent requirements around information gathering, document verification and fact-checking during the onboarding process.  Firms that continue to rely on gathering of key client documents solely in paper format will not only have inefficiencies throughout the onboarding process but will also face challenges responding to information requests from regulators in a timely and cost-effective manner.

Failure to comply can result in significant financial and reputational risk. Lack of proper compliance systems for geographic-specific regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML), for example, can result in substantial fines.

Disconnected systems and information silos

Disconnected, aging systems can be a drain on your firm’s time, personnel, and bottom line.  Information silos are common – systems, content management, compliance systems, back-office systems and platforms tend to be spread out, sometimes with little interoperability.  Inputting and integrating the information requires manual effort, making it difficult for investment advisors to quickly access relevant information and meet investor needs in a timely manner, as well as integrate new products within the existing architecture.

How can automation help?

Client onboarding is not merely a back office or administrative function. It can be your firm’s key competitive advantage, and the ease with which your firm can quickly acquire data and disseminate it throughout the process is critical to effective onboarding.

Automating processes across multiple channels, such as mobile, web portals, branch networks and third parties, is recognised as beneficial for lessening the time it takes to open an account, cutting costs and providing a better customer experience.

How can your firm best employ the power of digital to develop a comprehensive, client-focussed  process? In a study conducted by Aite Group, the following characteristics were identified as key:

Omnichannel – employing mobile and web technology to capture images, documents and relevant data using the customers’ and financial reps’ existing devices.

Accuracy – using solutions that are able to directly extract data accurately from pictures of the physical documents, a critical component of the onboarding process.

Automated – investing in workflow tools to automate and track the completion of process steps.

Visibility – providing front-office staff with transparency over the process and alerts.

Consistent experience across channels and devices – ensuring that the customer’s experience is best-in-class regardless of the customer’s method of engagement with the firm.

Efficiency – meeting clients’ expectations for speed, while managing regulatory risks.

Fast and compliant onboarding

We provide technology solutions that streamline the initial information-intensive interactions between your firm and your customers, eliminating labour-intensive, slow and error prone processes that can damage your firm’s ability to win business.  You can digitally capture essential documents such as IDs (passports, driving licenses, etc.), proof of residency (utility bills, etc…) and more at the point of origination – when and where customer interactions actually occur, whether at a branch office or via web or mobile channels – and launch automated processes and real-time monitoring of workflows that reduce onboarding cycles to a fraction of the time they normally take.  Data is automatically captured, extracted, and integrated into the correct workflow and routed to the appropriate department or employee – no manual tasks are required, and errors are eliminated.

“Instead of spending hours manually entering transaction data, our employees just need to quickly validate the details that the system captures automatically. Kofax solutions will save a significant amount of effort for both our branch staff and central operations teams.”

Kofax Customer, Finance Sector.

Your customer’s mobile device can essentially serve as a “scanner” that automatically captures, extracts, and classifies data from any type of investor document during the customer’s first meeting with your firm.  Document production and e-signature technology enables your investors to sign documents on their mobile phone before the meeting finishes. The solution employs flexible, rule-based workflows that ensure the correct process steps are followed. New account documents and asset movement paperwork are securely stored and tracked, regardless of format, making content easier to manage from point of entry to final archive, delivering efficiencies that can increase your firm’s ROI and reducing the risk of regulatory non-compliance.

Alternatively, for those wishing to still submit documents via post, email or online forms, the same processes can be adhered to by utilising scanning and capture technologies to extract data from documents sent in paper or digital formats.

Removing processing gaps and inefficiencies

Your firm can increase system access, integration, and compatibility to ensure existing technology investments are maximised. Robotic Process Automation (RPA) can be used to fill the processing gaps that exist between your Portfolio Management System, business systems, and workflow applications across the enterprise. Disconnected systems and departments will no longer create processing bottlenecks and your team will be relieved of the burden of manual data entry and data look-ups – increasing satisfaction and allowing people to invest more time in their core activities.

Tasks such as preparing information to launch new funds or reconciling monthly statements can be automated, removing a significant proportion of administrative work.

In summary

By harnessing the power of document management, imaging and workflow software, firms can take a giant leap forward on the path to digital; simplifying and streamlining time-consuming and manual tasks, reducing costs and providing a superior service to clients – instead of shuffling paperwork.  An integrated approach is key; a solution that seamlessly integrates with business systems to enable advisors to have single click access to important client documents, which speeds account opening and asset movement, enables faster time to revenue, and enhances the overall customer experience.

Embracing digital technology means that wealth managers and advisory firms can reduce client inertia and speed up the process – resulting in faster time to revenue, reduced costs, and increased profitability.

“For our customers, the process is very straightforward – they fill out a simple form and provide some documents. Behind the scenes, we have a host of document capture, data extraction, classification and case management processes being driven by Kofax TotalAgility, plus integration with a number of third-party systems. The beauty of Kofax is that it can take all this complexity and turn it into a very smooth, seamless process at the front office.”  

Kofax Client – Wealth Management

1, Leveraging a Digital Approach to Meet Wealthy Customers’ Needs. Javelin Strategy & Research 2015.

2, Towards True KYC: Technological Innovations in Client Due Diligence. ClearView Financial Media, 2016.

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