Reduce onboarding processing times

This blog is the second in a three-part report series by Chartis and Encompass. The reports investigate challenges banks encounter in corporate client onboarding and present automated Corporate Digital Identity (CDI) as a solution.

While the first report outlined the pain points in client onboarding, the second examines how CDI can address these challenges, with a focus on how to reduce onboarding processing times. The final report will focus on best practices for implementing CDI successfully and cost-effectively.

Addressing the challenges

Client onboarding can be a lengthy and resource-intensive process. Often, banks spend over 90 days to onboard a single corporate client. This is exacerbated by bottlenecks and difficulties in recruitment, retention, and training. However, implementing automated CDI can significantly alleviate these issues, particularly at the identity verification (IDV) stage. By streamlining downstream processes, banks can achieve notable improvements in operational efficiency and cost savings.

Chartis’ research clearly highlights the financial burden. Typically, Tier 1 banks spend 4.5 times more on manual processes and people, compared to technology, when onboarding corporates. Mid-tier banks face similar inefficiencies. Often the total costs exceed $9.9 billion spent on customer due diligence, along with an additional $2.8 billion on downstream investigations. These figures exclude the hidden costs of managing these processes.

The onboarding process is time-intensive, typically taking between 90 to 120 days and requiring approximately 51 hours of manual labor. Key stages — such as identity verification, triage, screening, profile completion, and quality control — are major contributors to these delays.

For individual (retail) onboarding, 33% of spending at a typical Tier 1 bank is allocated to technology and data, with a 2:1 ratio of technology to manual processes. In contrast, corporate onboarding dedicates only 17% to data and technology, with 83% spent on manual processes. This represents a nearly 5:1 ratio.

Addressing core pain points

Several additional key obstacles can severely hinder the onboarding process, including:

Lack of a standardized client identity
Inconsistent global regulations
Complex ownership structures
Reliance on manual processes
Stale and fragmented data
Legacy, siloed technology

These challenges create bottlenecks in customer due diligence (CDD) and KYC processes. However, with the integration of CDI, two significant changes occur: manual data collection and processing steps are removed, and additional research and investigations are reduced.

Encompass’ work with clients has revealed significant reductions in time and effort through the automation of the KYC process. When implemented effectively, CDI accelerates the onboarding process by offering a faster and more comprehensive understanding of entities undergoing KYC, leading to an average 32% reduction in onboarding processing time.

The most substantial time savings, about 65% of the total savings with CDI, occur during the initial stages, including identity verification, triage, and risk assessment. These early efficiencies create a positive ripple effect throughout the rest of the process.

Key areas of improvement include:

Triage and risk assessment: By collecting data upfront, analysts gain a complete view of risk, enabling quicker and more informed decision-making.
Outreach and profile completion: On average, 14% of CDI time savings can be realized across these two areas. As most data is available upfront repeated client interactions are minimized, improving both client experience and internal efficiency.

By automating CDI, analysts and relationship managers can shift their focus from manual, repetitive tasks to higher-value, strategic activities. This not only improves job satisfaction but also strengthens client relationships.

What is CDI?

CDI creates a comprehensive view of client risk by consolidating private and public data in real time, allowing for fast and accurate validation. It provides a “360-degree view” of corporate entities, like the approach used for individual identity verification.

By integrating structured and unstructured data, CDI generates a consolidated risk identity, which can be used throughout the onboarding and review processes. This approach minimizes manual errors and enhances KYC processes, ensuring compliance while streamlining workflows.

Who benefits from CDI?

CDI offers substantial advantages, particularly for:

Commercial and corporate banks: Tier 1 institutions with inefficient onboarding processes can benefit from the 32% end-to-end processing time savings CDI provides.
Banks focused on client experience: In markets with high drop-off rates, a more efficient onboarding process can serve as a competitive advantage.
Banks facing recruitment or retention challenges: CDI frees up analyst time allowing staff to focus on higher-value activities, which can increase job satisfaction and retention.

Streamlined KYC is the future

CDI represents more than a technological upgrade; it is a strategic evolution that can help banks streamline operations, enhance compliance, and maintain competitiveness in an increasingly complex regulatory environment.