Research Study on Time, Cost and Challenges of Client Onboarding

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Study finds that onboarding can take up to 34 weeks and cost up to $25,000 per client.

03 February 2015, Dublin, Ireland - Fenergo has today announced the results of a commissioned Total Economic Impact™ (TEI) study of Fenergo’s 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 study was conducted by Forrester Consulting with 14 representatives of 13 corporate and investment banks with headquarters in the US, Canada, Spain, Netherlands, Switzerland, Australia and Russia, two of which were Fenergo clients.

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:  

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:

The study also incorporated a composite view of interviews with Fenergo clients in an effort to measure the ROI (return of investment) of implementing an end-to-end Client Lifecycle Management solution and found that Fenergo clients can expect:

According to Joe Dunphy, VP Product Management with Fenergo,

Joe Dunphy Fenergo

“We were asked by clients and prospects at a roundtable in New York to conduct research into how much time and money it costs to onboard clients across the industry. For each day the client is not fully onboarded (i.e. not trading), it costs the bank the equivalent of a day's average revenue for that client. For a single client, this may not be significant, but when applied across the entire client base, the total cost of onboarding delays can be extensive. Couple this then with the actual cost of onboarding. Even with a conservative figure like $6,000 per client, if a financial institution has 150,000 clients, then this amounts to $900,000,000 for the onboarding of all clients - not to mention the onboarding of additional products per client over the client's lifetime with the institution.

“COOs are tasked with cutting costs and improving efficiencies but they are struggling to achieve this in the face of increasing regulatory change and unprecedented fines for non-compliance – all of which has a tremendous impact on the time and cost involved in onboarding institutional clients. This research offers a strong and compelling business case for implementing a Client Lifecycle Management solution to streamline the Regulatory Onboarding and Entity Data Management processes”. 

-       Ends –

For more information, please contact:

Fiona McLoughlin, VP Marketing, Fenergo 
T: +353 1 9013600 
E: [email protected]

About Fenergo (www.fenergo.com):

Fenergo is an award-winning provider of enterprise Client Lifecycle Management platform solutions designed to help financial institutions to manage the end-to-end regulatory onboarding process – from onboarding, to management of client and counterparty data and regulatory compliance with existing and emerging regulations.These solutions simplify and rationalize often complex operational interactions of client lifecycle management by orchestrating onboarding, regulatory compliance and KYC activities across all touch-points within the bank.

 

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