Why banking and financial services must change its approach

5 min read

Advanced onboarding – Why banking and financial services must change its approach 

The last two years have dealt a seismic blow to the banking and financial services industry, the impact of the pandemic left global commerce facing extensive and protracted disruption, whilst conflict in Europe has a resulting supply-side shock. One thing has however remained constant during, the importance of getting the basics right: 

  • Improving client experience 
  • Strengthening controls 
  • Reducing cost and complexity 
  • Earning client trust every day 

Few activities combine all of these transformational and reputational challenges like onboarding a new client and completing Know Your Customer (KYC), Anti-Money Laundering (AML) and credit decision processes. For onboarding and operations leaders, they pose unique, sometimes highly emotive, and highly complex challenges. 

The urgency to transform customer onboarding in banking and financial services 

Banks and FSIs have a unique opportunity, to take the lead and reach out to their anxious customers and establish long-lasting relationships. 

However, sales and relationship management teams face significant pressures to bring on new customers, only to find their efforts frustrated by the sheer length of time taken to arrive at a decision about whether the client meets the bank’s credit and risk appetite. 

As a result, it takes an average of 32 days to onboard a new customer, and thanks to the departmental nature of banking operations, each customer goes through around 8 different interactions during the customer onboarding process. 

As reported in a whitepaper by Arachnys: 

One in three (36%) financial institutions have lost customers due to inefficient or slow onboarding and 81% believe poor data management lengthens onboarding and negatively affects customer experience. 

84% believe the client experience during the customer onboarding process impacts the lifetime value of the client. 

But it’s not just customer experience that is suffering, slow onboarding processes in banks are costly: 

  • In terms of meeting KYC requirements for compliance, a large FI requires anaverage of 307 employeesto work towards meeting standards. The associated costs of that kind of people-based work are not insignificant. 
  • Poor CX costs a financial institution around $10 billion in revenue per year. 
  • Researchers at Oliver Wyman have found that it typically takes 90-120 days to onboard corporate banking customers 

Why a siloed approach won’t work in the current new normal 

Within banks and FSIs selling to companies involves a period of prospecting and engagement before any formal customer onboarding process can commence. 

More experienced individuals within these teams tend to be quite adept at recognising typical risk issues at this stage; if they are evident. 

For the most part, this sales process is worked upon in good faith by both parties, and aspects of a deal (such as products and limits) are decided upon readiness for the onboarding phase. 

Identity documents are taken and checked, and depending upon the process of the bank involved, the credit risk process is started, and aspects of the KYC process may begin. 

It is at this point that the bank or FSI is assessing various risks as required by their policies, designed to meet regulatory requirements. The outcome of these checks is often to complete the onboarding process and to welcome the new customer. 

However, in many instances, bank/FSI policies dictate that the nature of the deal needs to change in one or more aspects – and in more extreme cases, the bank or FSI is unable to complete the deal entirely. 

In the new normal it will be important for front-line staff to optimise their use of time and resources. If sales and relationship managers are wasting time chasing the wrong type of deal, then compliance and KYC teams are likewise being unnecessarily burdened with unmanageable workloads.

Customer Lifecycle Intelligence - the pillar of advanced onboarding 

It is commonplace to talk of meeting the KYC needs of a bank by accessing more complete data sources, more accurately and more quickly. 

On the surface, this may appear a good idea, but looking holistically at the goals of the bank, it is instead contributing to the problem of an unmanageable workload in KYC and therefore contributing to longer queues, longer onboarding windows, lower customer satisfaction and ultimately, greater dissonance between the twin drivers of meeting regulatory compliance and delivering commercial growth. 

Data alone is not the answer. 

Customer Lifecycle Intelligence (CLI) has the capability to drive onboarding transformation further and faster than ever before.   

CLI provides fast, frictionless onboarding that puts your customers at the heart of the process – whilst reducing costs, and improving compliance: 

  • Build a 360° view: unlock and map context all in one place and easy to analyse 
  • Reduce manual efforts: pre-populate onboarding forms based on enriched data  
  • Automate compliance policies: Set rules for consistent policy application  
  • Reduce cost to onboard: No matter how complex save valuable time & reduce friction 
  • Spot risks sooner:  get a more holistic view of risk to ensure nothing is missed  
  • Assess risk in real-time:  stay one step ahead of changes as they occur  

Onboarding Supercharged 

FullCircl enables you to definitively provide fast, frictionless onboarding that puts your customers at the heart of the process – whilst reducing costs, and improving compliance, too. 

 It works by: 

  • Delivering a customer experience that sets you apart - pre-populate your customer’s application using timely information from official sources  
  • Letting you look inside and seamlessly gather all required KYC, AML, and credit information in one fell swoop 
  • Go deeper - understand connections between directors, shareholders, and group companies up to the Ultimate Beneficial Owner 
  • Stay up to date and always on - we refresh our information up to three times per day and have the industry’s leading Service Level Agreement for service you can trust 

“We started working with FullCircl to explore ways we could introduce greater efficiency to the customer onboarding journey. We loved the idea of being able to aggregate data from a number of different sources and map our risk appetite to FullCircl’s rules framework to flag issues immediately. The result meant we could deliver a process which in some cases was 94% quicker than our existing process.” Ronan Heeran, Financial Crime Risk & Control Manager, Metro Bank    

“We exist to serve our customers and earn their trust by intuitively understanding their needs and working out solutions to their problems. FullCircl is the engine that drives this vision, providing our RM’s with the data and insight-driven ability to create compelling experiences throughout the customer journey.” Andy Gray, Managing Director, Corporate & Commercial Coverage, NatWest 

“FullCircl plays a fundamental part in ensuring our current customer onboarding process is slick and efficient. FullCircl's knowledge graph allows Banked to automate a portion of our due diligence, taking a bit of the heavy lifting off our shoulders. It provides us with answers to some of the key questions we were manually having to ask customers in our previous onboarding process.” Joe Pettersson, CTO, Banked 

What if you could increase your onboarding efficiency by 25%? 

You can!  

What are you waiting for? Start doing Better Business, Faster. 

To understand more about how Customer Lifecycle Intelligence can help every bank and FSI become digital future ready please download our new whitepaper.  

Contact us today to discuss how we can help you engage the right business customers, onboard them quickly and keep them for life. 

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