Client Onboarding for Financial Institutions: Transforming Your Business and Compliance Process

Recently, I had the pleasure to be present during a webinar with Tony Young, Director of Financial Services Solution and Brad Foohey, Solutions Consultant, from Pegasystems. The webinar “Derivatives Client Onboarding Solution – Transforming Your Business and Compliance Process” was attended by numerous bank on-boarding and compliance leaders from various financial institutions.

The hour-long session included presentations and a solution demo to provide compliance with the recently enacted Dodd-Frank rules. However, the larger purpose of the webinar was to illustrate how a financial institution can leverage technology to transform their business process while also achieving regulatory compliance. Mandates in regulatory compliance such as Dodd-Frank have not only created need for change but have also created opportunities for transformation. In order to drive business transformation, an organization needs to fundamentally change the manner it approaches the market. A holistic client on-boarding solution can help provide compliance with regulations such as Dodd-Frank, KYC and FATCA in addition to causing a transformation by removing the data silos that isolate lines of business and discourage up-selling and cross-selling while improving an inefficient process. The additional positive impacts of the same on speed-to-market and customer satisfaction can be profound and can provide the basis for positive transformation. The ability to solve immediate tactical issues while overcoming strategic challenges is the ultimate win-win.

Attendees of the webinar learned the following:

  • How an on-boarding solution can increase productivity and maximize efficiency
  • How to enable an organization to implement an automated regulatory compliance
  • How to empower an organization to optimize customer experience during the on-boarding process

Audience Feedback & Expert Views
Poll questions were posed to the attendees during the course of the webinar. These questions were aimed at understanding the prevalent issues that brought the attendees to the event. The responses to the first question clearly showed that the majority (73%) of the attendees had at least some level of automation in place w.r.t. on-boarding process; but that there were still manual steps that are part of the process. There are many reasons for this including the fact that many organizations have not yet implemented a strategic solution for Dodd-Frank and are often utilizing tactical workarounds.

The next poll question enquired about the pain points that capital markets firms are experiencing related to Dodd-Frank and client on-boarding. The most popular answer pertained to the time required to on-board a new client. Since the on-boarding process is time consuming, it is no surprise that the time required for it would be a pain point. This challenge is exacerbated, in part, by the additional challenges posed by utilizing only a partially mature client on-boarding solution as the responses to the first question illustrated.

The last question related to the biggest threat that the audience considered to their organization in the context of client on-boarding. The most popular answer was ‘Changing Regulations’- 69%. However, two other responses were tied as close second (54%). These related to competition and issues surrounding current regulations. During the webinar we discussed challenges from both new as well as existing regulations. Current regulations concerning KYC, AML and the Patriot Act are still important considerations during any discussion on client on-boarding.

Later, Brad Foohey gave a demonstration of Pegasystems’ Onboarding platform built on the PRPC platform, which manages complex processes, advises through each step and automatically enforces regulations for a smooth transition from sales to fulfillment. The session ended with the audience submitting a number of questions to the panel regarding the Pega PRPC platform capabilities and how specific issues regarding client onboarding could be resolved. Pega and Virtusa are helping capital markets organizations incorporate Dodd-Frank specific compliance requirements for their derivatives client on-boarding process using Pega’s New Business Backbone framework. The solution enables these organizations to solve legacy issues, inefficient processes related to client on-boarding and to implement a Dodd-Frank compliant solution designed for an institution’s specific needs.

In case you missed our webinar, you can watch the recording here.

How has been your organization’s journey so far towards making its internal systems Dodd-Frank compliant? What are the challenges you are facing? Do share your thoughts and experiences. And, if you have any follow up questions you’d like to ask about client on-boarding in financial institutions, feel free to get in touch with us!