Onboarding costs up to $25,000 per client

Dublin-based Fenergo has today announced the results of a commissioned Total Economic Impact (TEI) study of its Regulatory Onboarding and Client Lifecycle Management Solutions. Conducted by Forrester Consulting, this study measures the time, costs and challenges involved in onboarding institutional clients and the benefits that can be gained from implementing a full end-to-end Client Lifecycle Management solution.

Dublin-based Fenergo has today announced the results of a commissioned Total Economic Impact (TEI) study of its Regulatory Onboarding and Client Lifecycle Management Solutions. Conducted by Forrester Consulting, this study measures the time, costs and challenges involved in onboarding institutional clients and the benefits that can be gained from implementing a full end-to-end Client Lifecycle Management solution. 

The key findings show that financial institutions generally don’t have a good view about the average time it takes or how much it costs to onboard new clients or a new product for existing clients. However, broad estimates suggests it takes: 

  • Two to 34 weeks for financial institutions with completely manual client onboarding processes;
  • Two to 12 weeks for institutions that had implemented partial onboarding solutions with basic workflow capabilities;
  • Less than six weeks for more mature organisations that had implemented a full end-to-end Client Lifecycle Management solution.

It proved harder to calculate how much it costs to onboard a new client due to the fragmented nature of the onboarding process (spanning sales, onboarding, compliance, credit, legal and back-office operations), with costs also varying according to the client’s particular risk rating and applicability to regulations. However, broad estimates suggest that it costs up to $25,000 per client, with the average cost calculated at $6,000 per new client.

The study addressed the top three challenges faced by the interviewed institutions, which include:

  • Data Quality – While most interviewed institutions have a shared goal of implementing a client master file, they struggle to tear down existing data and process silos.
  • Operational Efficiencies – Specific issues are attributed to the transitions between the different parties to the onboarding process and the front-to-end flow of onboarding.
  • Customer Experience – Clients are contacted on average 10 times during the onboarding process and asked to submit between five and up to 100 documents (either directly or through external sources). Nine of the 13 interviewed organizations agreed or strongly agreed that the client’s onboarding experience has a strong impact on the lifetime value of the client, with 10 claiming that they have lost deals due to inefficient onboarding.

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