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Client Off-Boarding & Onboarding

Client Off-Boarding

Fenergo’s Client Lifecycle Management solutions enables financial institutions to manage the end-to-end client lifecycle from initial onboarding all the way through to the off-boarding of the client or account.

Why Conduct Client Off-Boarding?

Client off-boarding may be defined as the proactive management and removal of redundant, obsolete or incorrect information held on clients, accounts and assets. Inactive or dormant accounts are not a revenue stream and can actually cost your financial institution money, as they still need to undergo regulatory (AML and KYC), credit worthiness checks and reviews each year (not to mention all of the staff, technologies and operational processes required to maintain these review processes). And of course, the higher the risk associated with the client, the more frequent these reviews must be conducted, potentially using higher-skilled staff to ensure full due diligence compliance. One financial institution has estimated that it costs them up to £3,000 per client per year to maintain accounts that they know to be dormant.

Fenergo’s Client Lifecycle Management solution enables financial institutions to off-board clients seamlessly. The criteria to off-board clients / accounts differs from institution-to-institution, however, Fenergo recommends the following as a guideline:

  • If the account has been inactive for 36 months or one month immediately post M&A transaction (i.e. the account was opened only for the purposes of a single M&A transaction) and there are no open positions / trades on the account;
  • If there has been a manual request to off-board a client (e.g. from the client, relationship manager etc.).

Just like the client onboarding process, the client off-boarding process is equally data and document-heavy (due predominantly to the need to evidence all regulatory compliance obligations). Given that most financial institutions are quite silo’d in nature (using numerous complex IT systems across various functional, business line and jurisdictional divides and storing client and counterparty data across a raft of data repositories with little or no interconnectivity), this adds a further level of complexity when attempting to off-board a client / account.

Fenergo’s Client Lifecycle Management solution enables financial institutions to complete this process efficiently and seamlessly by:

1. Assessing Off-Boarding Request

The solution sends a notification to the Relationship Manager to assess the request to off-board the client / account in context (i.e. make sure it is done for the right reasons). This ensures that off-boarding follows a rigorous review process before the decision to finally off-board the client / account is taken. As part of the assessment review, the Relationship Manager needs to answer a crucial question – why does this client / account need to be off-boarded? This provides them with an opportunity to contact the client and ask them about their account / transactions to determine if off-boarding is the right course of action or if they can meet the client’s needs better with another range of products / services.

2. Determining the Impact of Off-Boarding on Reliant Parties

If it is decided to off-board the client / account, Fenergo Client Lifecycle Management checks the organization structure for interdependencies that may impact other clients / accounts. For example, if the legal entity is associated with a parent company or other companies in different roles (e.g. guarantor etc.). Once a full understanding of the legal entity’s associations and activities is gained, Fenergo Client Lifecycle Management commences the process to disassociate reliant parties e.g. IM funds etc.

3. Off-boarding the Client / Account

Once all reliant parties have been disassociated from the legal entity to be off-boarded, Fenergo Client Lifecycle Management updates the Legal Entity Role to Off-boarded. To ensure full auditability of the process, the user must add in a reason as to why off-boarding is taking place (based on the original assessments by the Relationship Manager). The Client Off-boarding process must be approved by a senior manager before being marked as complete. Fenergo Client Lifecycle Management solution provides a dashboard and task queue-driven process to ensure full visibility throughout the process.

4. De-activating from Vendor Systems

The final step off off-boarding involves purging the client / account from linked internal systems. Fenergo Client Lifecycle Management distributes a notification that the client has been off-boarded to all related systems to commence the de-activation process from source systems downstream.

Benefits of Client Off-Boarding with Fenergo Client Lifecycle Management

  1. Save operational and compliance costs related to reviewing clients and accounts in accordance with regulatory review processes (e.g. KYC and AML client reviews).
  2. Cleanse and remediate accounts, data and documentation.
  3. Opportunity to reconnect with lapsed clients to determine if their needs are being met with current products / services or could be better met with another selection of products /
  4. Achieve a more compliant and auditable Client Lifecycle Management process.

Useful resources

Regulatory Onboarding

Onboards new clients or new products efficiently in compliance with a broad range of regulatory obligations.

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WhitepapersDownload

A Vision for Client Lifecycle Management: Connecting the Data

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Case StudiesDownload

Client Lifecycle Management for Capital Markets

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