It is estimated that HNW client wealth will exceed $42 trillion by 2025 in APAC making this region the world leader in HNWI population and wealth. Yet, despite high returns on investment, Asia-Pacific HNW client satisfaction with their wealth management firms remains significantly lower than that of their counterparts in other parts of the world. There are a few reasons for this.
1. Lengthy Client Onboarding Times
Lengthy client onboarding times are having a significant impact on the overall client experience. In a recent Hong Kong Private Wealth Management survey by KPMG, onboarding times had increased to 40 days in 2018 – compared to 30 days in 2016.
2. Increasing Regulatory Obligations & Enforcement
In a climate of regulatory uncertainty, private banks and wealth managers have stepped up their compliance procedures to such an extent that HNW clients must go through a slow, expensive and cumbersome onboarding process. This is further amplified when one considers the cross-jurisdictional nature of the private banking space, and the fact that more than 40 financial regulators current operate in the wider APAC region. Moreover, in the past ten years, APAC regulators have levied over $609 million in AML, KYC and sanctions-related fines to financial institutions in breach of global and local customer due diligence rules. And this trend looks to continue over the next few years.
3. Repeated Document Requests
In response to the risks of regulatory uncertainty, compliance officers operate in a somewhat defense-driven manner, consequently burdening HNW clients for documents that may have already been collected for another purpose. The manual nature of the process doesn’t help either. HNW clients are often required to print, sign and post dozens of documents, which once received by the institution, must then be rekeyed into several other systems by front and back office staff. Not only is such a manual process time-consuming, resource-intensive and prone-to-error, but it has a direct impact on time-to-revenue.
4. Lack of Front-to-Back Office Visibility
Another pain-point for relationship managers based in the APAC region is a lack of transparency on the progress on client applications. The resulting delay leaves clients frustrated, especially if the onboarding process is a lengthy one. This can often result in client abandonment of account applications during onboarding.
5. Legacy Systems
Many of the aforementioned challenges are a direct result of private banks failing to embrace emerging technologies and instead relying on manual, paper-based systems. For example, the process of verifying and authenticating the identity of HNW clients often requires the submission of multiple documents.
DIGITALIZING THE HNW CLIENT EXPERIENCE
From the perspective of the HNW client, such a cumbersome onboarding process results in a highly adverse customer experience. This is especially true when one considers that an estimated $4 trillion of Asian HNW client wealth is expected to be passed down to the millennial generation within the next decade – many of whom will demand frictionless, digital interactions with their financial provider. If private banks in the APAC region do not respond to the challenges of a slow and cumbersome onboarding process, HWN clients will ultimately be forced to look elsewhere.
So, something needs to change!
Many of the challenges identified can be alleviated by re-assessing the current reliance on outdated, manual, and paper-based systems. By embracing digital onboarding solutions, private banks can provide their HNW clients with a positive customer experience from the very get-go.
- Multi-Channel Onboarding:
The client onboarding experience sets the tone for the entire client-advisor relationship.Today’s HNW clients want to be able to interact in a frictionless manner with their private bank on their preferred channel of choice from the initial touchpoint. By providing secure, digital self-service channels, private banks can deliver streamlined client outreach and secure data and document exchange, enabling the delivery of a quick and efficient client onboarding process for new and existing clients.
- Digital Data Capture:
Digital data capture, e-signatures and electronic ID&V processes will become a necessity rather than a nice-to-have during the onboarding stages. While identity verification is obviously a crucial part of the AML / KYC onboarding process, innovative technologies such as biometric solutions can streamline the process. Through the use of optical character recognition (OCR), HNW clients can submit identity documents via a smartphone device, which can then be authenticated and processed autonomously by utilizing robotic process automation (RPA) technologies.
- API-Integration with Systems and Data Providers:
The ability to re-use existing information held on clients will further reduce the burden for the HNW client, while integration with other systems and data providers will help form the single view of the client required to deliver a personalized and compliant client experience.
- Enhanced Visibility:
W clients and their relationship managers that have the ability to check the status of their account application in real-time will be able to set their expectations accordingly, subsequently ensuring that the client-to-banking relationship gets off on the right foot. This can be delivered by integrating CRM with the bank’s digital client onboarding solution to deliver the end-to-end view of the client and their applications.
As such, making the transition from manual-to-digital will allow private banks to reduce their time-to-revenue, and perhaps, more importantly, ensure that the end-to-end client life cycle is a long-standing one,
Download Fenergo’s Private Banking and Wealth Management Brochure to learn how Fenergo can seamlessly digitalize your complex client onboarding processes, increase operational efficiency and deliver a more streamlined experience for your clients.