Digital Onboarding. e xperience e xcellence e xpertise e xecution

Transcription

1 Digital Onboarding e xperience e xcellence e xpertise e xecution

2 marks the sp t. With $1 trillion passing between generations each year, the need for a digital paperless process is key to being able to retain and grow AUM..02

3 Fact Find What is Onboarding? At its core, onboarding is the process of finalising a new relationship with a prospective client. As the first engagement with the firm, it is critical that this process is as easy and tailored as possible, as it will help set the tone for the ongoing relationship. While the approach to this key process varies between firms - as well as depending on a number of factors such as the type of client and products offered - there are a number of key commonalities. These include the need to capture a fact find, the creation and discussion of a proposal, regulatory AML checks and finally the set-up of the client's details into the firm's systems. Mandate Selection & Proposal Validation The Traditional Onboarding Process Traditionally, firms in the Wealth & Investment Management Sector have completed onboarding for prospective clients using a mix of face to face meetings, formal paper documents, and s. As this information is captured manually, it often then needs to be re-typed into one or more internal systems to help complete the approval and set-up of the client. 1 Forbes HNW Wealth Report Wealth Report by PWC Account Opening Asset Transfer The Case for Change This process presents a number of key challenges and difficulties to Wealth Managers in both growing their AUM, and reducing their cost base: 1. A reliance on physical forms Millennials are now a generation who expect to be able to utilise services digitally, rather than the more traditional paper based approach. With $1 trillion passing between generations each year 1, and attrition rates of over 50% in intergenerational transfers 2 the need for a digital paperless process is key to being able to retain and grow AUM. Additionally, traditional Wealth Managers face competition from the robo-advice industry, with the potential market estimated at up to $19.5 trillion of assets under management 3. Therefore, without the ability to meet these younger clients expectations, and comparing unfavourably with the ease of use of the 'robo-advisors', firms will increasingly have difficulty in retaining intergenerational transfers and attracting new and increasingly technologically advanced clients..0303

4 experience Over 50% of Wealth Management firms either have a digital onboarding solution or are looking to create one in the next 12 months Poor right-first-time rates A key element of providing a successful client experience is ensuring that the onboarding process is 'right-first-time' and that the length of the onboarding process (and therefore the time to revenue) is as short as possible. In particular, firms often need to return to clients multiple times to request additional documents that could have been collected in one go. 3. A high cost of take-on The need to repeatedly enter the same information into different forms and tools can lead to a serious increase in overall costs as well as placing an administrative burden on the front office. This, in turn, impacts margins and requires operational and front office staff to be re-directed from other more productive activities. 4. A reliance of engaging clients through traditional channels The next generation are four times more likely to prefer live online chatting facilities as a method of communicating with a wealth manager compared to those aged 50 and above. 4 Additionally, for those businesses providing services to clients domiciled in another country, the need for face to face meetings can be limiting and prohibitive from a cost perspective. With regulators such as FINMA in Switzerland embracing channels such as video chat, not being able to engage clients on their terms can result in lost opportunities. 4 Robo-Advice, Revolution or Evolution, robo-advice-set-to-dramatically-disrupt-the-financial-investment-market-withautomated-advice-says-new-report-from-ignition-house PAM Insight Digital Survey 2016 Creating a Digital Onboading Process Wealth Managers are now looking at how, by embracing digital, they can overcome these challenges, with over 50% of firms now either having a digital onboarding solution or looking to create one in the next 12 months 5. However before starting, it is critical to ensure that the business case for such an initiative is properly thought through and defined. In particular, firms should be focussed on three key outcomes, as to the why of their initiative: Creating a paperless experience (where all information, including the client signature, can be captured digitally) which supports a firm s growing market share with Millennials and other technically literate clients. Improving the customer experience by reducing the overall time taken to onboard clients, as well as reducing the number of times a client needs to be asked further queries (improving the right-first-time rate). Reducing the cost of client take-on by not just applying digital technologies to the customer experience, but also in fully integrating the process into back-end systems. With outcomes clearly defined, firms can then.04 focus on how to achieve these, and in particular, the two core components needed to deliver a solution.

5 Co-browsing, joint navigation and completion of portal by IM and client Digital identification & electronic capture of evidence Automated & real-time sanctions screening to support automated AML compliance Onboarding Portal excellence Multi-channel engagement via secure & recorded video chat and/or messaging Document management, for the sharing of documents and content Digital signatures, removing the need for wet signatures The Digital Onboarding Portal A key element of moving to digital onboarding is the creation of the tool via which client information will be captured, and through which multi-channel engagement can occur. Consideration should be given to how the tools fit into both a primarily remote customer journey (for example to provide fact find information prior to a proposal meeting) as well as a more traditional face to face engagement with the Investment Manager (where a tablet is used to collect and share information). Additionally, firms should look at how they can leverage additional technologies to enhance the customer experience, from the inclusion of video chat, through to the use of tools to digitally identify a client. An Integrated Process Achieving positive outcomes around the cost of onboarding and the time taken to onboard is about more than just the front-end technology the client sees. It also requires a focus on how to tie together the core portal, additional customer engagement technologies, and the firm s core systems. In particular, if an onboarding portal is simply a series of pretty screens from which information still needs to be manually re-typed into other tools, or manual forms printed to be signed, then many of the promises of a digital onboarding project will not be realised. Therefore, it is key from a technology perspective to ensure that the information is only captured once, and flows automatically from there into all the other pertinent tools and core systems. This also has the benefit of freeing up front office time and reducing the likelihood of data entry errors. Key Considerations for a Digital Onboarding Process As with any major change project, there are a number of key considerations for the creation of a successful digital onboarding journey: 1. Handling the complexity of onboarding different client types in different jurisdictions One key difference between 'robo-advice' propositions and the wider wealth management offering, is the range of variations in clients taking up these offerings. Key differentiators in the onboarding process are the jurisdiction of the client, the booking centre their accounts are being opened in, and whether this is an individual or an organisation. Where the client being onboarded is an organisation (for example a Trust, Charity or Company) then the onboarding process becomes significantly more complex, with the need to collect multiple sets of information from differing stakeholders. 2. Not neglecting the traditional paper-based approach Good change management and take-up will encourage many clients, including those you might not have expected, to move to a digital onboarding process. Some clients however, at least in the near term, will still expect and prefer the more traditional approach. A great digital onboarding process keeps this in mind, ensuring that as many of the benefits can be leveraged even where traditional application forms are used. This can be from allowing these to be digitally scanned and passed for processing between departments, rather than via a courier, to leveraging the fully integrated process to ensure that information still only needs to be entered once..0505

6 expertise Lower costs Keep up with millennials Provide an agile solution Go green Improve communication A B Simplify processes & save time Driving adoption with staff One of the major impediments to realising the benefits from a digital onboarding process can be the reluctance of the firm's staff to adopt the technology and change how they engage with their clients, rather than falling back on the traditional paper approach. A key element of implementing digital onboarding must, therefore, be the early involvement of front-line staff, as well as good communication, training and support for the new tools. 4. Ensuring compliance with regulations With many existing regulations and standards already in place, and more such as MiFID II & CRS coming, it is key that the impact of relevant compliance requirements are fully considered. Key considerations include the full auditing of conversations through new digital channels (such as ensuring video chats or messaging are recorded and auditable) through to ensuring that appropriate Anti-Money Laundering checks are still performed. 5. Mobile devices A key mantra of digitisation is Mobile first, and that a digital strategy should always put the mobile device at the heart of their strategy. Firms need to, therefore, decide what devices they want to support digital onboarding on, from traditional computers to tablets and mobiles. In particular, it is key to consider whether the application process can, and should, work on a smaller screen mobile device as an app, and also where the Investment Manager is collecting information with a client whether it should also work offline. Why Implement a Digital Strategy Wealth Managers face a range of challenges over the coming years to maintain and grow their market share, both within their traditional propositions for HNW Individuals, and also across new robo and hybrid advice proposal. A digital onboarding solution can not only help to reduce overall costs but also to provide younger clients the same digital experience they have come to expect from other service industries. Delivering a truly integrated onboarding solution to realise these benefits is still, however, a significant challenge, with a great front end experience needing to be twinned with an adaptable, flexible and fully integrated onboarding backend. To deliver this, firms need to look not just at how they can deliver the client screens, but also to look holistically at how the wider onboarding process operates from the initial contact, through to the set-up of clients and the transfer of their assets. It is essential for firms to engage with partners and deploy technology that can create an integrated processes and solutions at all of these stages rather than simply delivering a single element such as the portal as though the client user interface were the only challenge. Digital onboarding is a complex orchestration of interactive tasks, collaborations and commodity services that will only deliver business benefit and superior client outcomes when considered.06 as a whole.

7 execution A digital onboarding solution can not only help to reduce overall costs but also to provide younger clients the same digital experience.07 they have come to expect from other service industries.

8 hits the sp t. Wealth Dynamix Curtain Road Shoreditch London EC2A 3AR (0) e xperience e xcellence e xpertise e xecution