A Roadmap to Client Onboarding Success

Growing Your Onboarding Process & Going Paperless

Agenda

1. Choosing an onboarding solution– Buy vs. build – selecting an approach– What will it need to do? A comprehensive checklist– Where should it reside – SaaS vs. Onsite?

2. Paperless account opening

3. Getting started – what to automate first?

4. How is incremental growth best achieved?

Leading service provider to wealth management firms Founded in 1999 4 locations, 100+ staff Products and Services:

Automated Client Onboarding Statement/Confirm Processing ePresentment Tax Form Processing Enterprise Risk Management

Doxim Inc.

Client On-boarding

Beyond account opening Opportunity - engage and grow new customers

without increasing expense A focus on customer experience

Why Does it Matter?

During on-boarding, customers and assets are in motion

Customers most receptive to cross-sell during this period

Market driver – differentiate yourself with

“Customer Forward Thinking”

* Harland Clarke Financial Industry Studies (2011)

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Deloitte, 2012“Growing Pains in Wealth Mgmt & Private Banking”

Deloitte, 2012“Growing Pains in Wealth Mgmt & Private Banking”

Aite Group, Sep-2012“Account Opening Pain Points in the Front Office”

Forrester Research, Apr-2009“Best Practices: Customer Onboarding”

Onboarding Implementation

Onboarding Success

Buy vs. Build

• As firms with large IT departments approach onboarding automation, the “buy vs. build” discussion often starts

• In our experience, building onboarding solutions in-house always costs more than budgeted, even for firms with enormous coding resources

Wealth Management Onboarding

And behind the scenes…

• Client onboarding is complex, detailed and constantly evolving. For most financial services firms, it involves 300-600 questions, 5-10 workflows, 30-150 documents and 200-300 business rules.

• All of these need changing as new products are introduced, new regulations are imposed and organizational changes occur such as mergers and acquisitions occur.

• Too often, firms do not accurately define their business processes and operating model first

Technical Considerations for Onboarding Success

Utopian Solution

• Full automation when following “The Protocol”: request out for investor approval, prepopulate assets for acct transfer, investor approves, transfer

• Uniform agreements and paperwork regardless of custodian and only display relevant disclosures and only display the disclosures once.

• Immediate approval of investor and all accounts• Paperless• Business intelligence built into system for upselling and suitability• Comprehensive package with one signature regardless if assets held away• eSignature accepted by all parties• Transparency into account opening status for all parties (investors and advisors)

for all accounts including assets held away• Lower costs: No duplicate data entry, no NIGOs, drive adoption of electronic

delivery• Better controls than manual processes• Data and analytics generated from system to better understand investor buying

patterns.

How do you decide where to start?

• The recommendation is always to start where you will realize your best ROI – and use that ROI to fund expansions of the project.

• So, as part of your process analysis/ROI study, you’ll identify your most-used account types, and automate those first.

• As you progress, you may find that you have account types that are never used, and you can streamline your processes accordingly. If you automate everything up front vs. incrementally, you miss the opportunity to discover these improvements

Onboarding Automation

1. Offer a robust rules engine behind the scenes which automates complex decision processes and mandates compliance with enterprise-wide best practises

2. Offer connectivity to document management and imaging solutions

3. Be able to work with eSignature, as there’s a movement towards acceptance of that technology in the field

Going Paperless

• Increasingly, e-Signature support is becoming part of onboarding offerings across the industry.

• The reason for this? Increased comfort levels with paperless account opening, an increased interest in mobile technologies, and a clearer understanding in the industry of the regulations which govern eSignature adoption.

eSignature Drivers

1. COST – Physical paper handling is expensive, from the mailing costs, through the sorting costs, image capture costs and eventual archiving.

2. SPEED -Paper handling is slow. Waiting for the mail or even printing/signing/faxing is slower than just a few extra clicks.

3. CONVENIENCE - By enabling eSignature you can have an entirely digital straight through process. This is particularly appealing for investment advisors who visit clients. They no longer have to lug around an inkjet printer for example.

Onboarding Automation

4. Integrate seamlessly with your back office.

5. Provide access to the onboarding application through multiple channels in real-time, securely

6. Allow you to easily control changes to forms, questions, business rules, workflow

7. Offer a flexible delivery model - installed on your premises or SaaS

SaaS or Onsite? Things to WeighSaaS OnSite

Cost Pay as you go, per user, per month, etc.

Up-front capital costs for hardware and software licensing.

Customization Limited customization through service provider

Fully customizable onboarding.

Hardware Hardware and software reside at provider site

Customer must provide hardware and system platforms to run onboarding platform.

Security Access to SaaS applications is via Internet. Security must be carefully managed.

Lower security risk because of on-premises secured location*

Control SaaS provider controls systems and is entrusted with access to customer data

System control resides with your onsite team.

Back Office Integration

• The problem? Data held in silos can impair a complete view of the customer.

• Increasing suitability and risk assessment requirements may mean you need to look at a bunch of data to determine suitability.

Back Office Integration

The solutions:– Unifying KYC data collection and client onboarding to

give a complete view of customer – Storage and reuse of customer data – requires

bidirectional access to back office applications

Why Configuration Matters

• Usually, with an onboarding application, there are four things which need to be modified:

1. Forms

2. Workflows

3. Rules

4. Questionnaires• An application which permits your team to configure and

reconfigure these will save you a tremendous amount over the lifetime of your onboarding solution

• Imagine your business analysts being able to add a question to your onboarding process through a GUI, not hard coding.

Mobile Banking Explosion

• Javelin Research indicates that mobile banking gained 10 million new users in 2012 and currently reaches one-third of the mobile adult U.S. population.

• 1 in 6 customers switching banks say a poor mobile banking experience prompted them to shop for a new bank

• Online brokerages are increasingly offering mobile services for DIY investors, and full-service brokerages are looking for ways to incorporate mobile technologies into their onboarding processes without losing the personal broker/client relationship which sets them apart.

(Javelin Research Report “2012 MOBILE BANKING, SMARTPHONE, AND TABLET FORECAST: Mobile Banking Gains 10 Million Users as Smartphone and Tablet Adoption Soars)

Mobile Client Onboarding

Drivers:• Inefficient account opening process• High error rate• Need to attract younger tech savvy customers• Need to meet clients remotely and process account

securely without carrying piles of paper

Mobile Client Onboarding

Benefits:• Eliminate the need for the advisor to obtain an ink

signature from the client via e-signature• Easy image capture of ID via tablet prevents

transcription errors• Complete account opens in one visit, dramatically

reducing abandonment rates• Perform end-to-end digital account opening, eliminating

the need for paper-based forms.• Meet with clients at their home or place of business• Offer real-time, same-day client onboarding anywhere

Onboarding Automation

8. Offer real-time reporting and event-driven notifications to dashboards and etc.

8. Do more than just account open – Business Process Management - any form, any workflow - to maximize ROI

9. Offer multi-language support - French/English, English/Spanish

KYC Updates – Another Automation Target

• Depending on firm maturity, our research suggests you do 100-300% MORE KYC paperwork than account opening paperwork

• KYC updates should be automated through the onboarding system to provide the same operational efficiencies and transparency which you experience during initial onboarding.

• Early automation will allow you to be responsive to upcoming FATCA/IIROC regulations which mandate more KYC coverage.

• Implement event-based KYC updates (noting that a client’s investment behaviour has changed and proactively contacting him or her) vs. just updating every 36 months

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Account Transfers• Our questionnaire takes the place of account transfer paperwork including

government mandated forms• Once completed, all asset transfer information is captured, reducing

representative’s need to “understand the paperwork requirements” for the Request for Transfer

• No need to retrain employees on updated paperwork requirements should forms change

• NIGO checks ensure the asset transfer forms are completed correctly and all documentation is present.

Sounds Expensive!

Account Opening Costs

• Manual, paper-based system - No scalability- Slow, time-consuming process - Duplicate data entry, high error rate- Low customer satisfaction

• Inflexible proprietary system - $100,000 yearly updates- Long development lead time- Does not support the need to make changes quickly

due to M&A, new regulations and products

$36.00per account open

$500 Kmin. upfront cost

OpenAdvantage®

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Introducing OpenAdvantage®

Configurable Client Management Platform• PDF forms and HTML questions supporting business rules,

workflow and document generation• User interface enables configuration. No coding required• Understands data – not just form filling• Not just KYC, but understand your customer better• Experience with direct, managed accounts

and clearing broker models• Integration with enterprise systems:

- Back-office, CRM, e-signature

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Integrated E-Signature Ready to Go

• Out-of-wallet questions used to confirm the identity of the signer - information based on light-touch credit check

• Questions can be detailed or based on key metrics e.g. DOB, Driver’s License • Documents can be signed in multiple places (similar to initialing)• Process can be repeated by multiple signers each notified via e-mail• Once the document is signed customer

is presented with list of completed documents for review

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• Improved customer experience and increased sales

• Speeds process and reduces costs – estimate 60%

• Increases data accuracy for better compliance

• Simple configuration and maintenance

OpenAdvantage® Benefits

Some Concluding Thoughts

• In choosing an onboarding solution, a very thorough needs analysis is crucial.

• Onboarding is complex and constantly changing – your solution must keep pace

• Consider what to automate first? How can incremental growth be achieved? How can I best get early ROI

• Consider the role eSignature and mobile technologies may play in your onboarding in 5 years, and start to plan

Q & A

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Phone: 1-866-475-9876 Email: webinar@doxim.com