4th June 2020Fenergo, the leading provider of digital transformation, customer journey and client lifecycle management (CLM) solutions for financial institutions (FIs), and Chartis Research, the leading provider of research and analysis on the global market for risk technology, have collaborated to create a focused return on investment (ROI) report and model for CLM solutions. The model demonstrates that FIs implementing the Fenergo solution can generate a ROI up to 700% over a four-year implementation period by reducing operating costs, accelerating client onboarding and achieving greater flexibility and regulatory control.  

Key Findings:

  • Fenergo’s CLM delivers an average ROI of 379% over four years
  • Within the first year, financial institutions are seeing a ROI of up to 195%, in using Fenergo’s CLM solution
  • Challenger banks saw the highest ROI (704%) while using Fenergo’s CLM solution over a four-year implementation period, due to these institutions’ agility and modern infrastructures
  • Fenergo’s CLM solution provides a ROI of up to 106% for large complex global banks
  • Regional universal retail banks can achieve ROI of up to 289% while private banking and asset management arms of global banks can achieve up to 309% over four years

Erik van Gelein Vitringa, Lead Product Owner KYC/Client Acceptance ABN AMRO, said:

“Regulatory compliance is still a priority for many financial institutions. By providing a group-wide end-state solution for our client lifecycle management processes, Fenergo helps us to achieve our goals. Obviously, the ability for us to be able to demonstrate compliancy to relevant laws and regulations contributes to cost control at bank level although that is hard to quantify. In addition, from a practical business value perspective, Fenergo is a vital part of our broader KYC framework. Not only are we harmonising processes across the bank, but we are also rationalising our IT landscape, embedding straight-through processing in client onboarding, and increasing operational efficiency in many ways. In that regard, the ROI is evident, and this is just the beginning.”

CLM solutions enable FIs to obtain a 360 client view, manage new and existing clients and related data, documentation, and regulatory requirements, ensuring full compliance with global and domestic regulatory obligations throughout the entire client lifecycle. ROI in this report was influenced by the structure of the institution, its overall size and operational agility, the number of employees in its CLM business unit and the extent to which it has a modern digital infrastructure. The model focuses on the benefits of the CLM processes rather than the evaded risks.

“Consolidating cost metrics across the enterprise and business lines is a major focus for most financial institutions in today’s climate. As the industry responds to the impact of the global health crisis, ROI that can be attributed to specific outcomes is crucial to the decision-making processes of any technology implementation,” said Leonardo Lanzetta, Head of Data Management & Analytics Group, SMBC Nikko Securities America, Inc.

Manual or semi-manual CLM processes are often undertaken by disparate business lines and technology systems causing many FIs to lack a comprehensive view of internal processes and associated cost structures. This can make calculating the ROI of CLM a major challenge. To address this issue, Fenergo in collaboration with Chartis Research, designed a model to specifically help financial institutions determine the value they can gain from digital CLM solutions. The model was applied to Fenergo’s CLM software platform to determine how it can help FIs to increase productivity, accelerate time to revenue and lower costs associated with reducing regulatory risk.

“As the COVID-19 impact continues, it’s clear that the effectiveness of financial institutions’ response will depend on governance and technology. To manage their risk exposure, all FIs need to develop new technology strategies and invest in systems and maintenance,” said Sidhartha Dash, Research Director, Chartis Research. “How financial institutions act now could ultimately affect the reputation and resilience of the business in the long-term.”

The ROI model is based on detailed data sets, including C-suite interviews at nine different financial institution types. The report provides some indicative results, achieved by applying the model to Fenergo’s customer base, and gives a high-level view of the potential outcomes and cost impacts.

“It has never been more important for financial institutions to have the ability to quickly respond to rapidly changing economic conditions. Manual processes for Anti-money Laundering (AML) and Know Your Customer (KYC) compliance are hindering financial institutions in their ability to quickly onboard clients. The digital transformation of CLM is key to achieving the crucial 360-degree client view from front-to-back office connectivity across different business units, allowing for rapid onboarding and faster time to revenue. This research by Chartis offers a strong and compelling business case for implementing a CLM solution in today’s challenging business environment,” said Marc Murphy, Chief Executive Officer and Founder, Fenergo.

Fenergo’s award winning platform is utilized by over 80 global banks including Danske Bank, ANZ, PNC, National Australia Bank, Canadian Imperial Bank of Commerce, Anglo Gulf Trading Bank, Royal Bank of Canada, First Abu Dhabi Bank and Mizuho.

To view the full report please click here.