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CLM done right: Why being customer-centric is best for your financial firm

By Chiara Gelmini, Business Practice Manager, Appway

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Onboarding for Wealth

Appway is the global leader in client onboarding for the financial services industry. Onboarding for Wealth enables leading wealth managers, private banks, and family offices to provide their high net worth clients (HNWIs) with a personalized experience while guaranteeing compliance to local and global regulations Onboarding for Wealth combines digital and physical...

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Regulatory Reviews for Wealth

Regulatory Reviews for Wealth enables a data-driven orchestration of the compliance process that provides a holistic overview of clients. Regulatory reviews are expedited due to data centralization and the monitoring of internal tasks, which are assigned according to priorities. Compliance experts can design the review process and meet deadlines with the...

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by Appway
| 05/09/2019 12:00:00

Today’s private banks, wealth managers, broker-dealers, multi-family offices, and universal banks are under increasing pressure to meet clients’ growing expectations for financial institutions to put the client first, and to provide personalized support beyond initial onboarding. Whether dealing with major life moments—new additions to the family, buying a house, opening a business—or smaller changes like a new address or change in country of residence, today’s clients look for a trusted advisor who engages with them proactively through every transition in order to take care of their financial journey as conveniently and competently as possible. They want the same experience from banks as they receive from digital leaders in other industries (like Amazon, Uber, and Spotify) that offer services defined by timely, hyper-personalized, and relevant interactions. Clearly, as a relationship manager, you are under heavier scrutiny to be customer-centric. However, while businesses and end-customers alike are talking about this shift in emphasis, there seems to be little overall concrete progress in this direction.

Why are you still struggling to meet these expectations? In order to provide comprehensive advisory support, you have to handle an enormous amount of data and a multitude of tasks throughout your clients’ lifecycles. According to the research we at Appway conducted with our customer base in Q1 2019, at least 70% (and up to 95%) of a financial firm’s total workload over the course of a year is dedicated to managing their clients’ changes in life circumstances, while the remaining operations involve onboarding procedures [fig 1].


(Figure 1: Operational Distribution Puts Customer Experience at Risk -- Source: Appway internal research of existing client data)

This is due in part to the need for relationship managers to assess entities related to any given change in customers’ circumstances, determine whether they require any due diligence or have legal impact, and address them appropriately.

Additionally, we found that 7 out of 10 financial firms understand how critical a role efficient and convenient onboarding plays in order to grant fast revenue and high customer satisfaction, and, therefore, had launched different degrees of initiatives to digitalize and streamline client acquisition activities. However, only 3 out of 10 institutions have taken steps to develop their operations related to clients’ changes in circumstances. This data not only shows a lack of follow-through in taking a customer-centric approach, but also shows that the industry is technologically under-equipped to face these time-consuming, costly activities efficiently; the more common technological tools are designed to make things easier for the business user, not more accommodating for the end-client. In short, banks have put the focus on improving processes to get clients in the door, but have fallen short when it comes to the activities connected to managing clients’ ongoing financial journeys.

Typical obstacles preventing you from managing your clients’ lifecycles smoothly include:

  • Inefficient workload distribution due to functional silos, a lack of parallel workflows, and redundant activities
  • Heavy administrative work for front liners, which keeps them from doing the job they are meant to perform: ensuring productive client relations
  • Fragmented local and global compliance requirements which lead to non-standardized procedures, lots of back-and-forth with the approval process, and a host of exceptions to manage

These issues not only reduce your effectiveness, but also detract from the customer experience, rendering it depersonalized and irrelevant. And when customers are not receiving the service they expect, they are incentivized to search for better service with your competitors.

So, how can you avoid the potential pitfalls of client lifecycle management?

We have come up with three CLM prescriptions for you to relieve operational burden and stay ahead of the competition:

  1. Boost your productivity through empathic banking
  2. Enable cross-departmental continuity
  3. Sharpen decision making

Boost your productivity through empathic banking
Simply being reactive to customers’ changing conditions with a pure pull-sale strategy is no longer sufficient. You must start engaging with customers much more proactively, and suggest next-best-actions or opportunities to them (push-sale strategy).

Empathic banking consists of the perfectly balanced combination of pull- and push-sale strategies. To achieve an empathic banking approach, you must deliver effective account planning at the very moment of any change in your clients’ lives. Therefore, it is crucial to gain a 360° overview of your clients' contexts—including insights, archived documents, actual accounts, products, and services—with a tool that consolidates data from multiple channels, sources, and systems into a unique point of contact, enhancing the ability to manage material changes and facilitating cross-departmental collaboration with subject matter experts.

The detection of compelling events is key to understanding a client’s situation and acting upon changes effectively. The most innovative banks have even started serving their customers outside the traditional banking business context by opening up to the external ecosystem in order to address their clients’ evolving needs in real time (e.g. by offering insurance coverage, legal support, estate consultancy, etc.). Not only does this demonstrate a more client-first approach, but this also provides new revenue streams.

Enable cross-departmental continuity
Imagine a world where, using collected data, you can track dependencies and holistically assess the impact of a single material change on a client’s overall situation—for example, in regard to relationships, parties involved, and related accounts—and address it with the right expertise at the right time by seamlessly distributing tasks across your entire firm.

In order for this scenario to be realized, you must improve internal efficiency and do away with functional silos, all while guaranteeing compliance and responding to multi-faceted developments; this is possible only if you empower employees by encouraging collaboration.

By driving teamwork across departments and leveraging technology in order to allow employees to mix and match process-driven work with data-driven work and case management, and users to switch seamlessly between guided and expert work, you can manage changes in clients’ life and financial circumstances more smoothly. More specifically, this can be facilitated by incorporating automation when handling simpler or high volume changes, and seamless orchestration with the complex ones. A continuous collaboration—both vertical within a team, and horizontal across all departments and different types of expertise—sits at the core of this advisory process. Shifting from an Individual approach to a Team approach, wherein collaborators and experts support advisors, is essential in to order to achieve provide the best possible service.

Sharpen decision making
You must implement faster, more transparent decision making without sacrificing competence. How can you do this? With tools that allow you to assess, monitor, and organize the decision-making process while decreasing operational cycle times, thereby enabling you to predict approval paths and initiate additional due diligence investigations or regulatory reviews in order to minimize risk. Moreover, these tools help you serve clients in a more timely and hassle-free manner, which in turn strengthens clients’ trust and loyalty toward your firm.

Indeed, AI is expected to play a growing role in the financial industry over the next two years; leading firms in the sector are already adopting data-driven automation technologies that predict needed approvals and interdependencies among the various decision paths.

In addition to predictability and automation, transparency is another element necessary for sharper decision making. Comprehensive visibility of the context and the applied changes, complete with full auditability and task traceability, is crucial to ensuring an effective decision-making process.

In light of this industry pain-point, we had to go beyond discussing challenges and giving you our CLM prescriptions; we at Appway have launched a new solution to help you overcome the common obstacles related to managing clients’ changing circumstances in their life and financial status: Smart Client Update. This solution complements Appway’s established best-in-class client lifecycle management (CLM) offering, which includes Onboarding for Wealth and for RetailRegulatory Reviews for WealthDigital Mortgage, and Digital Banking Platform. This way, you can have the tools to walk the customer-centric walk, not just talk the talk, all while keeping your competitive edge.

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