Wealth Management – Welcome on board?

Other industries can seem way out in front when it comes to their version of onboarding, or that first taste of the brand promise in reality

Buy a premium, performance tuned version of any German engineered automobile and expect a personalized tour of the factory. Great hotels welcome you with tailored concierge packages. Upscale retail outlets offer ‘personal shopper experiences’. The devil (or the angels) is in the detail of flawless process and a sense of total focus on YOU as the valued customer.

So what about the financial industry? In wealth management we could define onboarding as: ‘the process and procedure a bank or other financial institution follows to gather new client information and requirements and then input that data onto its respective systems in order to do business.’

But do we always make coming on board with a new account the effortless start of a wonderful relationship? Do we maintain the same focus and energy we commit to achieving new client acquisition, once they have signed up? Or do we – even unconsciously – have a mental image of a ‘Cinderella’ discipline when it comes to onboarding?

In reality, in wealth management, highly motivated front office people spend a great deal of time attracting new business. Then they often expend even more energy on the frustrations of an onboarding process that can be slow and complex for all, including the client.

Yet to dismiss this issue as a question of the financial industry just ‘not getting’ customer service would be too simplistic. The technical complexity of the most cutting edge limousine pales into insignificance, when you compare it to the tasks faced by the bank back office in achieving compliant onboarding of a new account, with a multinational dimension and a complex trust structure.

There is a whole range of responsibilities faced by banks that does not apply to hoteliers or luxury goods manufacturers. This begins right at the start, with the choice of whether to accept a new customer or not. Banks can no longer sign up new accounts simply to grow the business. The onus is on them, to make sure that each new customer is also ‘the right kind’ of business. Get it wrong and the consequences can include reputational damage and substantial fines.

This regulatory burden is set to grow through 2015, as we see even greater complexity around risk management for AML/KYC, MiFID II requirements, HNW service offering developments and more. Even the burden of proof itself is under discussion, with some jurisdictions reviewing whether, in future, banks may have to show that they ‘got it right’ – instead of clients having to establish any wrongdoing.

In the face of these huge and growing responsibilities, a ‘simple sign-up’ for each new client is an impossibility. Everything must be seen to be thoroughly in order: client identity, location, asset ownership, profile of services chosen and provided, and applicable jurisdictions. These issues have to be resolved by onboarding that’s expected to cope with levels of discovery inconceivable just a few years ago.

But, simultaneously, the front office is calling for smooth process, a great new customer experience and, above all, speed. Can we reconcile the demands of business growth and customer satisfaction with a highly complex and onerous compliance framework?

Yes, but not by expecting the process and infrastructure of the past to deal with the onboarding demands of today, let alone the future. So what’s the alternative? There has to be a move away from the silos, internal complexities and disparate approaches that still characterize so much of the data handling aspect of onboarding. Instead, we need to get it right by design not chance.

The design itself must take a repeatable and comprehensive approach, factoring in key issues such as requirements, technical specifications, data definitions, services and interfaces. Onboarding planning should be a standardized process that includes clear project plans, achievable timelines, testing criteria, and a defined organization to manage the process in practice. Nothing stands still. So all plans should be scalable, depending on the profile of the services involved and likely account type complexity and type of service offering (for example, discretionary or other).

With the growing diversity of account structures, fee models and service offerings, the need to focus on effective onboarding – starting with account opening process optimization – is surely a major priority for 2015. The message is clear: get on-board with optimal onboarding. Now, it’s not so much a case of Cinderella missing the ball. Without her, there is no ball!