Holistic reform for client-centricity

Increasing client-focus should be a central ambition for all businesses. Quick transformation of the whole organisation is a major, expensive task, but small, important improvements can be targetted. For example, wealth management client on-boarding can be reformed relatively quickly.

Veit Jung, Senior Manager – Alpha FMC

Increasing client-focus should be a central ambition for all businesses. Quick transformation of the whole organisation is a major, expensive task, but small, important improvements can be targetted. For example, wealth management client on-boarding can be reformed relatively quickly.

Presenting a new ultra high net worth private banking client with dozens of documents to sign manually is a terrible way to begin a new relationship. Wealth managers seek to become trusted partners with their clients, so starting with this cumbersome procedure gives a terrible impression. “In the rush to become compliant with MiFID 2 and GDPR, the impact on the client experience often took secondary importance when projects were designed and implemented,” noted Viet Jung, senior manager with the consultancy Alpha FMC.

Step-by-step

Transforming your business into a fully client-focused operation is normally as costly as it is desirable. Hence Mr Jung suggests taking a step-by-step approach. With fewer major regulatory changes on the horizon, firms now have the time to rethink how they interact with clients, and how these processes can be improved. Often this is about improving procedures before potentially adding technology to maximise user-friendliness.

“IT can offer part of the solution, but often having a joined-up approach from front to back office can often result in the quickest wins,” he said. For example, it is obvious to client facing staff that the frequently bureaucratic on-boarding procedures are are off-putting. However with a degree of effort and investment, Mr Jung says it is possible to improve this. “Reorganising documentation within a single legal ‘wrapper’ would mean the client would only need to sign once rather than dozens of times,” he said.

Technology on top

From here, a further project could then introduce other client-friendly measures, such as an electronic signature. Not only are e-signatures easy for clients to use, they are well suited to cross-border business models, with the parties not needing to be physically present to give their approval.

Yet still back office legal and compliance teams might be reluctant to change. For them, the systems they recently put in place seem to be working well. This is less about technology, but rather taking a holistic view of the business, and encouraging teams to work together. CEOs are best placed to set the tone, ask teams to come up with ideas that can boost client centricity and other efficiencies, and give support to cross-departmental projects that target these outcomes.

Outsourcing alternative

Alternatively, financial businesses could look to outsource procedures. “A fintech could take over the front-to-back on-boarding process, while keeping the financial services firm fully in control of the process and data,” Mr Jung noted. There is the potential to integrate potentially revolutionary tools around know your customer (KYC) checks. Clients sharing information within KYC utilities and searches of publicly available big data are potential options. Video identification can also help to make KYC a more appealing process for clients.

Strong personal relationships is the essence of private banking. Technology helps by giving clients more control of their finances, providing information, and streamlining mundane procedures. First, though, the organisation must be reformed to enable these changes.