Nabil Brighet, Damien Giret and Romain Grillet (BearingPoint): The Client Lifecycle, a stake of Operational Effectiveness and Commercial Efficiency 

Nabil Brighet, Manager - Luxembourg, Damien Giret and Romain Grillet, Senior Consultants - Switzerland at BearingPoint (Banking & Capital Markets), reveal the results of their study into the search for efficiency in the Client Lifecycle. 

What is “Client Lifecycle” and why is it so important for banking institutions? 

Client Lifecycle Management (CLM) is the set of processes that are related to the cycle of a business relationship. The cycle starts at the account’s opening, ends at the account’s closure and includes all the actions taken in the meantime such as periodic reviews and change in circumstances. These processes are centric to the client experience, and they capture the reputational and regulatory risks faced by all financial institutions. In addition, they mobilize up to 30% of full-time equivalent employees (FTEs) continuously within the Client Management & Compliance departments, and with a varying intensity in the Front Office teams. By optimizing these processes, private banking players want to improve client satisfaction and free up commercial time. This is the last big step in the industrialization of this industry. 

 

"By optimizing the life of accounts, private banking players want to improve client satisfaction and free up commercial time" 

What are the issues? 

Take a player in the private banking industry, with several bookings and sustaining tens of thousands of business relationships. The main challenges revolve around the continuous collection and processing of a very large amount of client’s data and documents. Contrary to popular belief, client onboarding represents a volume of activity that is not very intense and diffuse, because it is spread over a large population of wealth managers. This is despite the 350 to 600 data which are collected – including around 100 relating to regulatory aspects (MiFID) – in addition to the 15 to 25 documents collected when opening an account in the simple case of a natural person. The periodic review represents a much higher volume of activity with the processing of tens of thousands of KYC files per year. Finally, the workflow related to change in circumstances remains by far the most dense and constant of all, as it involves hundreds of thousands of events per year. Growing regulatory requirements, to which are added ever more extensive client centric requirements, will increase the volume of information to be collected and processed. 

 

So what answers are banking institutions currently providing? 

Many banking players have undertaken projects, such as the implementation of CLM solutions, that simplifies processes and which will ultimately involve the client through self-care. Robots coupled with AI are also applied to automate certain tasks, such as the reading and analysis of results related to the screening activity. Finally, several actors are investing to further digitalize workflows, ranging from the dematerialization of documentation to the deployment of the client’s electronic signature. 

Although these solutions lead to productivity gains, they are not sufficient to achieve the necessary quality that is needed to move towards “first time right” on standard KYC files. With this point in mind, our study has highlighted that the most important efficiency leverage is a greater accountability and an increase in skills of the Front Office.  

Amongst heritage, innovation and changing client needs, the search for efficiency in the processes linked to the lifecycle of the accounts, leads players to revert to the fundamental concepts of private banking, namely, building a long-term and high-quality relationship while guaranteeing an excellent service.