The client onboarding process is the very first cornerstone of a successful business relationship, making it one of the most important stages of the client lifecycle. The moment a prospect becomes a client, an impeccable client onboarding process is needed to ensure efficiency and client satisfaction.
Unfortunately, regulatory requirements have made this formal customer introduction process a significant burden. Since their first addition in the ‘70s, the total amount of laws and regulations has increased almost annually – constantly raising the regulatory compliance bar and making the client onboarding process a regulatory compliance nightmare.
Under these circumstances, it has never been as important to onboard clients simply and seamlessly. Current onboarding practices, however, are often cumbersome, complex, time-consuming and, to some extent, frustrating. Hence, a radical improvement of the client onboarding process is needed.
Below, we will shine a light on why a smooth and simple client onboarding process is important and concurrently highlight its benefits. To do so, we first need to understand what makes for an efficient client onboarding process.
What makes for a good client onboarding process?
One client onboarding in wealth management survey conducted by Deloitte found that banks themselves consider their onboarding processes not “very convenient” for their clients. Some respondents even stated that they still operate using a fully paper-based client onboarding process.
Clearly, this cannot be the way forward, and changes need to be implemented quickly. Therefore, we collected the most basic attributes that make for a “good” client onboarding process. These are not wild guesses of ours; instead, we chose attributes that are commonly identified amongst peers in the industry.
The following three attributes characterise a good client onboarding process.
A simple, smooth and seamless process is what enhances the client onboarding experience. A user-friendly journey is a must for all working businesses in this day and age. As Deloitte puts it perfectly, it can “set the right tone for a strong and long-lasting client relationship”.
The client onboarding process must also comply with all policies, laws and regulations. These regulations, used to support risk assessment, include a long list – from Anti-Money Laundering (AML) practices to Know Your Customer (KYC) requirements. And ideally, regulatory compliance should not slow down the client onboarding process.
A good client onboarding process needs to be fast with a quick response time. Average lead times of 14 days for client onboarding – such as published by the Deloitte survey – should remain a thing of the past. Instead, the client onboarding process should be replaced with instant responses to enquiries.
Now, the above three attributes are what we consider the most important ones when it comes to delivering a good client onboarding process. But why does it matter?
Why a good client onboarding process is important
We drew up 5 business reasons which we deem crucial for a seamless client onboarding process.
1. Demonstrate own value
First of all, the implementation of a smooth and simple client onboarding process allows a company to demonstrate its value to the client early on. A coherent brand experience should be the name of the game from the very start of the onboarding process. First impressions count, and missed opportunities to demonstrate your company’s value are difficult to reclaim later on.
2. Exceed client expectations
This reason picks up on the previous one but expands on the clients’ expectations. The customer experience can definitely be improved by implementing a simple, smooth and seamless client onboarding process. As mentioned earlier, this can be achieved by introducing a user-friendly journey. Clients who are accustomed to cumbersome and tiresome processes can be pleasantly surprised when they experience a distinctly smoother operation.
3. Increase efficiency and revenue
The client onboarding process should represent the ambitions of a company. Financial services companies that want to unlock their full business potential should make that visible in their client onboarding process. The drive for efficiency should lead the whole customer experience.
4. Ensure client satisfaction
Failure to implement a functioning client onboarding process increases the probability of driving clients away – the exact opposite of what is wanted when establishing a business relationship. Instead, a good client onboarding process will most certainly bind your clients to your company.
5. Improve regulatory compliance
Lastly, a successful client onboarding process must ensure that all parties comply with respective policies, laws and regulations. This part is not always easy. However, a smooth and simple client onboarding process with simultaneous compliance with all policies, laws and regulations across all jurisdictions can be greatly facilitated by automation.
Benefits of a good client onboarding process
Now, the benefits of a good client onboarding process include a broad variety of considerations. We collected the most notable ones:
● Accelerate the process by eliminating friction and unnecessary touch-points.
● Always stay compliant with the right set of requirements.
● Reduce costs by increasing efficiency through automation.
Unlock business potential
● Increase scalability of the business by understanding requirements across more jurisdictions.
● Minimise risks and misconduct by understanding the dos and don’ts.
Ensure client satisfaction
● A simple, smooth and seamless process is the equivalent of limited interaction, which makes for a satisfied client.
● Increase the reputation of the business by adding real value through great customer experiences.