The imperative to transform corporate and investment banking client onboarding

The goal remains elusive

But client onboarding can be a struggle to modernize. Consider what many financial institutions have to deal with:

• A manual patchwork of spreadsheets, emails, faxes, and file-sharing sites
• Practices that reflect the bank’s organizational and technology silos
• The need for extensive coordination and collaboration across various business and functional groups
• Redundant information being asked of the client and between internal groups
• Little to no transparency throughout the process—for clients and bank employees alike

Despite these challenges, client onboarding transformation remains a key imperative for the industry.

Everything starts with the client

If the client experience is subpar, it can negatively affect customer satisfaction and the bank’s reputation. With traditional onboarding for new clients taking as long as 16 weeks, clients are likely to view this part of their experience unfavorably compared with what they’ve grown to expect among their other banking interactions, both as a client and what they’ve personally experienced as a retail banking customer.

A lengthy onboarding process can result in higher attrition rates and lost revenue. For one thing, there’s the opportunity cost that comes from delaying when clients can begin transacting from their new account. Consider too that onboarding is often the best opportunity to meet a greater set of client needs. If the experience isn’t personalized and what the client expects, the ability to cross-sell is diminished.

Of course, an inferior client onboarding experience impacts existing customers adding new accounts as well. This can discourage the clients you already have from adding new products to their portfolio.

Agility matters

Regulations are constantly evolving—for example with AML, KYC, FATCA, and MiFID II. Without a flexible way to adapt to these changes during the onboarding process, banks risk delayed or inconsistent compliance, which can lead to violations, fines, and damaged reputation.

Beyond that, an agile onboarding process is needed for banks to meet shifting market demands. If complexity gets in the way of quickly rolling out new products in response to those demands, it can cost institutions the chance to seize a competitive advantage. With the lines of banking blurring, you can rest assured that fintech and more technology-oriented firms will be ready to respond.

Talent and the business can suffer

Internal considerations are part of the mix as well. Long onboarding times can hold up commission payouts to the front office, bruising morale and increasing employee attrition rates. This, at a time when banks may already be struggling to attract and retain needed talent.

At the same time, manual processes are prone to errors that increase operational, financial, reputational, and regulatory risk. For example, the internal controls associated with manual processes may be inconsistently adhered to or simply ineffective, creating operational risk. If controls fail or are circumvented, fines and public exposure can follow along with reputational damage that no bank wants.

Overcoming obstacles

Given these challenges, it might seem like a tall order to modernize client onboarding at corporate and investment banks, but the executives I’m talking to are plowing ahead. They’re exploring a range of approaches that can navigate the complexities of their environment while allowing them to keep up with change and meet client expectations. What are those approaches? I’ll share some of them in my next post.