The transformation of corporate and investment banking onboarding

COO Agenda

A top-of-mind issue for many corporate and investment banking executives today is client onboarding transformation, an imperative I discussed in a previous post. They clearly understand that a positive onboarding experience can set the tone for rest of the relationship, boost the lifetime value of the client, and enhance the firm’s brand and competitive stance in the marketplace. Despite the massive challenges involved, executives I’ve talked to are forging ahead with transformation efforts. What approaches are they taking and what factors are contributing to their early successes? Let’s take a closer look.

Banks aren’t following a single path

There are many ways to approach client onboarding transformation. The most common I’ve seen so far include:

  • Optimizing a specific onboarding function. Much of onboarding’s complexity is because it crosses multiple organizational and technology silos, so some banks are deciding not to tackle it end to end; rather, they go after large cost pools, such as AML/KYC.
  • Automating and redesigning current processes. Automating discrete processes and integrating workflows are leading to increases in efficiency and effectiveness. This approach is often subject to current constraints, so it can be more accurately characterized as incremental rather than transformational change.
  • Clean sheet, end-to-end redesign. Only a few banks are doing it, but this approach starts with a design mindset and with the customer perspective. This service design approach is very collaborative, iterative, and rapid prototype-driven, enabling true transformation and high business impact.
  • Outsourcing. In this approach, a service provider takes on some or all of a bank’s client onboarding technology stack and/or operations, assuming responsibility for service levels and ultimately unit-based pricing. While several banks are exploring this option, few banks seem to be going this route so far.
  • Pursuing cross-bank cost-mutualized solutions. This approach has had its highs and lows in terms of interest, with most banks seemingly viewing this as an aspirational longer term solution for the time being.

Regardless of the approach, anchor on a clear set of priorities

Of course, there’s no “right” way to transform onboarding; any of these approaches can lead to improvements. The key is to first identify a clearly defined set of priorities with specific and measurable outcomes to serve as your north star. Such priorities often include one or more of the following:

  • Promoting a specific brand moment to demonstrate the bank’s evolution and commitment to move to digital.
  • Enhancing the customer experience through changes that show the voice of the customer being incorporated, addressing the biggest customer pain points.
  • Reducing costs by establishing cost transparency and focusing on digitizing the process.
  • Increasing efficiencies to shorten onboarding times, for example, by removing manual steps, eliminating redundancies, using the power of data analytics, and increasing collaboration and productivity.
  • Improving agility for faster response to changing client, regulatory, or other market dynamics.

10 critical factors behind early successes

Just as transformation approaches and priorities can vary widely, success is likely to look different for each bank. Yet the most effective efforts I’ve seen so far are rooted in the following principles:

  1. Determine your appetite for change. Most banks have multiple change initiatives underway at any time. Many of these intersect with client onboarding at some level, so it’s important to consider all of them together and balance the appetite for change across impacted groups.
  2. Secure executive sponsorship. A grass-roots, ground-up effort just isn’t enough given the complexity of client onboarding. Sponsorship and ongoing involvement of the C-suite and line of business executives are an imperative for this type of transformation. 
  3. Keep client experience front and center. Transformation teams should incorporate client needs, preferences, and behaviors into the entire redesigned onboarding process. A new user interface alone will only mask underlying problems—changes need to be orchestrated all the way through from “front-stage” client experience to “back-stage” enabling capabilities. 
  4. Establish the business case. Often change initiatives are undertaken without quantifiable benefits identified upfront, financial and otherwise. Hand-in-hand with establishing clear priorities is the vital process of building a provable business case.
  5. Hold out for end-to-end improvements. As previously mentioned, some banks focus on discrete improvements, such as AML/KYC, in an effort to avoid the complexity of cross-silo changes. Real end-to-end transformation only comes when you tackle those bigger challenges.
  6. Streamline products along with processes. Product variations—treasury management products are a good example – can increase onboarding complexity, especially when a large percentage of those product variations are rarely chosen by clients. By rationalizing the product set and minimizing customization, banks can greatly simplify client onboarding.
  7. Acknowledge that new tech isn’t a panacea. Shiny new objects can often distract, so it’s important to remember that transformation is never just about the technology. Focus instead on the root causes, let the voice of the customer inform business decisions, and then technology can be treated as the enabler it’s intended to be.
  8. Rationalize requirements. A lot of information is needed during client onboarding, from the initial client meeting to account setup. Over-collection of data is often the result of redundant requests and document creep—a key source of client dissatisfaction. By rationalizing requirements between the various groups and paring back to only what’s really needed from a regulatory or internal policy perspective, both paperwork and complexity can be reduced significantly.
  9. Tackle the underlying rules. Onboarding complexity often stems from the rules or decisions that need to be made. By first understanding the rules and decisions, the process can then be used to source and provision the data needed to make those decisions. As a result, this can greatly simplify and streamline the onboarding process. 
  10. Remember that transformation is a journey. End-state results are not likely to be achieved in one or two quarters. Instead, look to design and execute the transformation program in a way that produces frequent successes and continually builds momentum so stakeholders remain engaged and motivated.

Time for a new path forward

Even if these principles are followed, corporate and investment banks may only achieve incremental rather than transformational changes in their client onboarding processes. Why is that when their retail banking counterparts have made such significant strides in their own client onboarding transformations? One important differentiator between retail and corporate/investment bank approaches is the adoption of a service design mindset.1 In my next blog, I’ll share a vision of the future of client onboarding and our view of ways to make even bigger strides toward real transformation.

Corporate and Investment Banking Onboarding Articles Series

Article 1: The imperative to transform corporate and investment banking onboarding

Article 2: The transformation of corporate and investment banking onboarding

Article 3: Achieving immediate and sustainable results through client onboarding transformation: A path forward

Back to the COO Agenda series

End note

For information on what a service design mindset is: “The Principles of Service Design Thinking – Building Better Services,” Interactive Design Foundation,

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