87% of corporate treasurers have abandoned banking applications due to lengthy onboarding Read here

Leveraging RegTech to digitize your corporate client onboarding process 

By Chris J. Arthur-Collins | Mon 22 August, 2022

As the first step in your customer relationship, onboarding sets the tone for the rest of the lifecycle.

However, despite widespread investment in customer experience, many financial institutions (FIs) are still falling behind when it comes to corporate client onboarding.

There are several unique challenges for banks striving to operate a smooth onboarding process, such as the complexity, risk, and higher level of scrutiny associated with managing larger institutions. However, RegTech solutions offer various ways to improve the process. Banks that can effectively digitize corporate customer onboarding can accelerate acquisition, reduce costs and increase customer satisfaction and retention.

We explore how leveraging RegTech to digitize key steps in the process, in particular, KYC due diligence, can transform your onboarding experience and reduce friction and drop-offs.

The challenges involved in corporate client onboarding

Corporate client onboarding can be a complicated process, involving numerous checks, unwrapping of complex corporate structures and managing multiple stakeholders across the process. Increased regulatory obligations require the review of large amounts of information from multiple data sources to effectively verify the identities and beneficial owners to determine the risk profile of potential clients. For teams working with manual processes, the time, cost and pressure involved in corporate client onboarding is significant. FIs that fall short of the required standards run the risk of AML fines for breaches and non-compliance, reputational damage and the loss of customer trust.

Meanwhile, expectations of corporate customers are changing, with many now used to seamless, personalized financial services experiences in their own lives and a wider business context.

LexisNexis recently estimated the global annual cost of financial crime compliance to be $214 billion, with nearly two-thirds of the cost attributed to labor rather than technology. Lengthy onboarding times are also a risk for customer acquisition, with Encompass research finding that four in ten UK businesses abandon banking services applications due to ‘slow due diligence processes’.

To maintain profitability, customer experience and competitive market positioning, FIs need to rethink their onboarding experience, moving away from manual processes and towards a digital RegTech model that aligns with customer expectations.

Why customer-focused onboarding needs digital solutions

As financial crime compliance becomes more complex, the corporate client onboarding process becomes a key determiner of success. Reliance on manual KYC and Anti-Money Laundering (AML) processes for onboarding exposes FIs to the following risks:

  • Increased financial risk from missed steps or human errors during onboarding
  • Poor customer experience from long onboarding times and lack of personalization
  • Inability to adapt to new market or regulatory demands in a timely manner
  • Increased human costs and a lack of scalability
  • Longer windows to realize revenue from new customers
  • Diminished cross-sell opportunity

These risks are largely due to the extensive amount of data and documentation collation and analysis involved in onboarding a new customer. Performing these checks is often hampered by the following issues:

  • Inability to locate required information
  • Poor data quality, either in terms of structure, completeness or detail
  • Inconsistent application of KYC procedures for onboarding
  • A need to search or ‘swivel chair’ across multiple systems, websites and data sources as well as review multiple media formats and tools
  • Legacy systems that don’t directly share data and require rekeying, creating further scope for human error

These issues result in compliance teams spending the majority of the onboarding time sourcing, checking and managing data, rather than focusing on customer care and service. By moving to a RegTech-enabled digital process, institutions can reduce risk throughout their onboarding process while giving corporate customers the experience they expect.

How does RegTech help digitize corporate client onboarding?

RegTech solutions can be leveraged to streamline the corporate client onboarding process by automating large parts of the data retrieval and collation process involved in AML compliance.

For many businesses, automation software is an essential tool for managing, structuring and transferring information between systems. For FIs, this can be augmented by an API connection to a single KYC automation platform to access trusted KYC data sources for analyzing and unwrapping complex corporate ownership structures and visualizing beneficial ownership.

This can be used to create a complete digital KYC profile complete with source documents, full data attribute lineage and a dynamic audit trail for every search.

Key considerations for digitizing corporate client onboarding

Digitizing onboarding is not about eliminating the human element of your compliance process. Digital tools work in tandem with your team to automate manual tasks, such as data and document gathering, freeing up your team’s time to focus on analysis.

Benefits of digital onboarding

By accelerating corporate client onboarding process and improving the quality of customer data throughout the lifecycle, banks and FIs can:

  • Improve client relationships
  • Retain more customers through onboarding
  • Manage risk more effectively
  • Unlock productivity and efficiency gains

Implementing a digital client onboarding process

For businesses already working with digital systems, RegTech software can be integrated into and enhance existing processes. By adding additional automation and data sourcing tools, banks can improve the quality of KYC, increasing the efficiency, consistency and control of their KYC operations.

Flexible, API-first solutions are designed to fit around current technology to enhance performance and accuracy improving customer experience. Encompass partners with leading technology providers, providing KYC solutions with the data and functionality that FIs require.

Embracing RegTech with Encompass

Encompass is a leading provider of automated KYC due diligence solutions for banks and FIs worldwide. Our award-winning RegTech platform enables compliance teams to streamline key KYC and AML tasks and includes:

  • Unrivaled pre-built integrations to trusted global KYC primary and premium data providers, enabling KYC data and document retrieval and collation from a single platform
  • Automation of manual processes to search multiple data sources concurrently and perform entity resolution and analysis, configured to your policy and risk-based approach
  • Streamlined corporate structure unwrapping and UBO verification and visualization
  • Creation of a full audit trail to prove end-to-end AML compliance to regulators, dynamically tracking every action
  • Digital KYC profile with full data attribute lineage and source documents produced for every search, providing the foundation for KYC refresh, KYC remediation and perpetual KYC (pKYC)
  • API connections to transfer information between workflow platforms and Encompass to enhance existing corporate client onboarding processes

Future-proof your corporate onboarding journey

To find out more about how you can utilize the latest RegTech tools to accelerate customer onboarding,  get in touch with Encompass to book a consultation with our experts or learn more about our automation platform.


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