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How CDI de-risks CLM implementation

By Clare Puplett | Mon 13 January, 2025
CDI de-risks CLM

As financial institutions continue to face rising client expectations and increasing regulatory demands, the need for robust digital transformation has never been greater.

One critical element of this transformation is the implementation of Corporate Digital Identity (CDI) systems. CDI, when deployed ahead of, or in parallel with, Client Lifecycle Management (CLM) systems, can significantly improve the CLM implementation process.

How CDI reduces risk

CDI is increasingly recognized as a strategic enabler for CLM systems. By automating the collection and verification of critical client data, CDI bridges gaps in the CLM process. Additionally providing a unified, accurate representation of the corporate entity.

Here’s how CDI reduces risks and enhances the benefits of CLM implementation:

  • Improved operational efficiency and client experience
    CDI automates the collection and collation of both public and private data, significantly reducing the reliance on manual outreach. Traditionally, document requests are performed via email and uploaded into the CLM system, which creates bottlenecks and delays. By integrating CDI with CLM, automation can streamline Know Your Customer (KYC) processes, reducing onboarding time, and enhancing the overall client experience. Banks can eliminate redundant steps, move clients through the onboarding journey more efficiently, and reduce the risk of abandonment.
  • Reduction of compliance risk
    One of the significant risks in the CLM process is human error. Especially when manually entering data and dealing with data verification and document collection. By automating these tasks, CDI reduces the potential for mistakes by providing a faster and consistent approach. This proactive approach to compliance not only reduces the risk of regulatory penalties, but also mitigates reputational damage that can arise from non-compliance.
  • Faster time to revenue
    CDI’s ability to automate data collection and verification frees up Relationship Managers (RMs) and KYC teams from time-consuming, manual tasks. This shift enables them to focus on more high-value, client-facing activities, improving productivity and accelerating time to revenue. With fewer administrative burdens, teams can prioritize client relationships and build more strategic engagements.

How CDI enhances CLM systems

CDI’s value extends beyond operational efficiency. It provides a 360° holistic view of the client, which is vital for relationship management.

  • Real-time KYC status
    With CDI, RMs can instantly access a client’s KYC status, enabling them to deliver more personalized and timely interactions. This enhances client satisfaction and helps RMs stay informed, improving their ability to offer tailored solutions and engage clients in more meaningful ways.
  • Retention and re-engagement
    CDI provides faster access to up-to-date client information, which helps banks anticipate client needs and make data-driven recommendations. This agility not only improves client satisfaction but also allows banks to respond more quickly to client requests, increasing retention and facilitating re-engagement.
  • Accelerating the CLM investment
    Integrating CDI with CLM systems allows banks to adopt a “capture-once-use-many” approach to data and documents, reducing repetitive tasks and enhancing the overall digital transformation of the client lifecycle. This approach not only unlocks end-to-end digitization but also ensures enhanced compliance across all stages of the client journey.
  • Laying a strong data foundation
    CDI provides a solid data foundation for ongoing KYC, perpetual KYC (pKYC), and AI-driven initiatives. By tracking data provenance at an attribute level, banks can ensure that their data is accurate and up to date, supporting their vision for CLM transformation and future-state operating models.

Long-term return for CLM systems

The value of CDI grows over time, with initial savings paving the way for even more substantial long-term benefits. Over three, five, and seven years, banks will experience rising returns from reduced operational costs and greater efficiencies across the client lifecycle.

Automation delivers measurable benefits as early as the first year of a transformation project. When implemented this way, the data foundations and process improvements that come with CDI configuration immediately enhance speed and control within existing processes, even when initially deployed via web-browser for analysts before full API integration.

Further reading: Accelerating ROI for CLM transformation

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