One-Time Data Entry: The Future of Onboarding in FIs

Understanding the Scope of Onboarding

In financial institutions (FIs), onboarding is not limited to new clients—it also includes existing clients seeking to establish new entities or open additional accounts. This process involves collecting vast amounts of data, starting with legal, contracts and Know Your Client (KYC) requirements. These include Customer Due Diligence (CDD) and compliance with Anti-Money Laundering (AML) requirements. However, these initial requirements are only the starting point.

Across the entire entity and account opening process, there can be involvement from upwards of 30 internal teams across the entire FI, including relationship management, operations, products and services departments. Externally, global sub-custodian institutions may also play a role, adding further complexity. These departments require overlapping or additional data for client, entity and account setup for their respective systems.

Key Drivers of Onboarding Complexity

1. Client and Account Scenarios

The complexity of data collection depends on the client’s onboarding scenario:

• NNN: New Client / New Entity(ies) / New Account(s)
• ENN: Existing Client / New Entity(ies) / New Account(s)
• EEN: Existing Client / Existing Entity(ies) / New Account(s)

2. Entity Structure Review

• Legal structure
• Founding Jurisdiction (e.g., local jurisdiction requirements as in Luxembourg)
• Number of beneficial owners
• Tax structure

3. Account Asset Details

• Number and type of accounts
• Asset types (cash, securities, physical, digital)
• Foreign or emerging market assets
• Physical Assets
• Third-party investment manager access
• Expected transactional activity

4. Types of Products and Services

• Custody, accounting, alternatives, derivatives, FX, tax services, etc.

Each of these factors influences the volume and type of data required, often resulting in thousands of data points and hundreds of documents per entity.

Challenges in Data Collection

FIs face the challenge of managing the flow of data across multiple segregated operating systems – each built on different platforms, developed at different times and requiring varying data formats. AI will become a game changer in addressing these challenges, however many operational groups still currently rely on manual intervention at some point in the onboarding process. Not only are the systems segregated, but the teams entering the data are almost always functionally siloed across the FI, especially legal, risk and operations.

In addition to regulatory drivers, the FI’s internal systems and processes often exacerbate the complexity:

• Manual processes and siloed teams increase client frustration and delay onboarding.
• Client documentation is not always prepopulated, and FIs often give clients hundreds of blank documents to be completed
• Many FIs rely on outdated methods like Word/Excel forms or basic portals.
• Disconnected systems lead to repetitive data requests—up to 60% of data elements may be duplicated.
• Data needed for operational setup is often not collected early, prolonging the process. Additionally, supplementary data may be required due to sanctions or negative news alerts.

Improving the Client Experience

When looking at the technology and operational structure of FIs, most have a mix of vendor systems and internally built platforms to handle legal, contracts, KYC, operations, products and services. The key to reducing frustration and friction for clients relies on the FIs ability to streamline the onboarding and data collection process. This includes:

• Collecting all necessary data upfront during the KYC phase.
• Sending data systematically across departments using AI or APIs if systems cannot be integrated.
• Creating a central data process and/or storage that enables data reuse to minimize repetitive outreach.

Solving for the Data Complexities with an Advanced Technology Solution

The ability for the collection of data to be entered once and shared across multiple systems and operational groups can greatly reduce and simplify the collection process for the client. What if one system could ease the burden to the client and collect the data in one single instance?

The X-Sight Onboard Solution does just that, allowing FIs to:

• Collect the client data once, via a secure and easy to use client outreach portal
• Use automation and APIs to connect and transfer the data to the disparate systems to ensure quick client setup.
• Leverage a robust rules engine, regardless of the complexities of client type, jurisdiction or products/services, to help automate the right data collection at the right time of the customer lifecycle.

Benefits

• Faster Time to Revenue: Accelerate onboarding and generate profitability quicker.
• Increased Automation: Lower costs through reduced manual and duplicative data entry.
• Risk Reduction: Minimize setup errors for both FIs and clients. 

Conclusion

In conclusion, onboarding data collection does not have to be such a daunting and complicated process. By streamlining data collection and leveraging automation, FIs can reduce complexity, improve efficiency and deliver a better client experience.

Learn more about NICE Actimize’s X-Sight Onboard Solution here.