• Matt Beattie, Managing Director at Beyond


• 09.03.2022 07:45 am
#data #Financial , Matt Beattie has over a decade’s consultancy experience working with Financial Institutions to deliver global transformation programmes focused on optimising client onboarding operations and delivering regulatory change.

Many of our Financial Institution clients have come to Beyond because they’re looking to reduce onboarding times, enhance process efficiency and ultimately enhance the experience provided to their customers. Obviously, client onboarding cannot be looked at in isolation, it is important to also review and consider all of the operational processes involved in the client lifecycle. If you want to deliver the best client experience, you need to ensure that every touchpoint offers an integrated efficient and seamless experience.

What we have found from our first-hand experience is that there are some common themes or challenges that impact our clients. Here I’ll share what they are and the recommendations and considerations we would share to try and address them.

First things first

Before launching into the challenges and potential solutions, I think it’s worth taking a moment to define ‘client onboarding’ and ‘client lifecycle management’. I do this because while ‘client onboarding’ and ‘client lifecycle’ are commonly used industry terms, there is no single agreed definition of what they cover and in fact, they are often used interchangeably. This in itself causes a challenge because it can cause significant variation around the intended scope (& expectation) of what these functions deliver for the business.

In our view, the baseline definitions are:

Client onboarding is the operational process from the initial request raised by the front line business team for a relationship to be established, through to the point that the operational, legal and regulatory activities are completed in order to permit a transaction to proceed.

Client lifecycle is a broader term deemed to cover both the client onboarding process, and additionally include all subsequent events related to the relationship (e.g. product additions, reviews that may result from a change in circumstance or at a specified frequency). It also covers the process of offboarding of a relationship should this become necessary.

Observations from experience

Working with a number of Tier 1 and mid-tier banks has highlighted that many client lifecycle processes are impacted by three high level themes:

1. It is critical to have clearly documented process flows and procedures. This will assist in clearly understanding future business requirements and ensure a common understanding across stakeholder groups

Many stakeholder groups interact with some (or all) of the client lifecycle. These groups each have their own expectation of the service or requirement on the output or outcome of the process which may or may not be being delivered. The lack of a common expectation, or statement of the required service levels, results in a service of varying quality across the organisation.

2. A business wide client lifecycle framework is essential if the desired objective is to drive consistency across multiple business areas

Independent approaches across business lines usually vary in completeness and result in an inability to provide a consolidated status for the business.

A significant benefit offered from a well-designed client lifecycle environment is the ability to provide a consistent and considered service, regardless of which area of the business the client interacts with. Business lines which have developed independently (or acquired from other institutions) often implement their particular operational approach in quite different ways (even if a common policy is in place). This will often lead to a poor client experience, but can also drive significant levels of inefficiency and even control gaps.

3. A common data model, highlighting the expectation of key attributes to be captured, will avoid conflicts of information across the client base

Inconsistent reporting across the client lifecycle is a major challenge for many institutions. While many organisations have invested in consolidating a number of data sources, these sources are not always widely understood. Discrepancies can occur leading to the data set not being trusted or even the persistence of inconsistent reporting. There is usually a need to address concerns, whether technical or educational, with the centrally recognised data source.

Recommendations to make a difference

To overcome these types of challenges, a series of enhancements should be considered. These would cover:

• The client lifecycle operating approach;
• Integration of a consistent framework across business areas;
• Articulation of transparent processes; and
• A carefully designed management information and control environment (driven by the central data source).

Typical recommendations may include:

1. Establish a central client lifecycle team, dedicated to defining and managing the overall approach.

The client lifecycle team should act as the ultimate owner, providing:

• A single point of contact for all stakeholders;
• A standardised operating framework outlining business expectations of the client lifecycle;
• Roles and responsibilities;
• Ownership of the technical ‘architecture’; and
• Oversight of any change initiative impacting the client lifecycle (or it’s data).

A central client lifecycle team provides greater control and clarity over the client lifecycle environment and associated processes as a whole. A consistent model can be established to manage and oversee changes to the client lifecycle.

2. Ensure there is specific focus on the data model and supporting analytics capabilities

This would ensure:

• The underlying data model is understood so it is able to be used accurately and consistently; and
• Controls and metrics are in place to provide transparency around process efficiency, key controls and interactions with the client population

Establishing automated reporting and control metrics enables decision making to be supported by underlying data. A dedicated analytics function can work directly within the client lifecycle team to ensure the metrics being presented are thoroughly understood. It also aids in identifying any inconsistent data sources so these can be rectified.

Planning for the future

Once a baseline level of control has been established around the client lifecycle a number of further steps should be considered. These steps will support the continued evolution of the digital platform:

1. Incrementally develop a data driven logic (rules) framework to manage process flows and decisions within the client lifecycle
2. Establish direct feeds from source data systems to feed the logic model
3. Implement a continuous improvement approach that can respond flexibly and rapidly to evolving operational and regulatory environment

Starting the journey to client onboarding transformation

These recommendations provide a general guide to help clients understand some of the areas that should be considered before commencing a client lifecycle transformation. However, while offering clear benefits, these recommendations must be implemented thoughtfully and with due consideration of the business areas and functions they are impacting.  Here at Beyond we have worked with a wide range of institutions, supporting them through the initial definition stage through to design and implementation. If you have a specific challenge or need help accelerating the transformation journey, then we would be very happy to help.

Beyond is a specialist consultancy focused on helping Financial Institutions accelerate business and digital transformation in areas such as client onboarding, client lifecycle management and financial crime compliance.