Beyond Digital Signature in Wealth Management

June 27, 2016

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If you want to solve a client onboarding problem in your organization, digital signature by itself isn’t going to cut it. If anything, it might put your organization at risk by being an unscalable solution.

Wealth Management firms that want to digitalize their processes often reach an impasse in executive meetings when they tunnel back from the surface problem (unhappy clients, frustrated advisors, expensive operations) to the root of the problem (outdated legacy systems, paper-based processes). Digitalizing seems so exciting, and even so easy, with the right technology partners. But when you tunnel back far enough and hear a definitive “we can’t change that system. Everything might crash.” from your IT executive, the defeat can feel crushing. At this point, many firms settle for shallow, flashy solutions, such as implementing digital signature.

 

We say that as a company that has been implementing digital signature for financial institutions for over 10 years.

 

Digital signature should always be viewed as one integral part of the onboarding process, and never as a standalone solution.

 

The problem digital signature seeks to solve is the slow, clunky, outdated client onboarding process. What digital signature actually achieves is improving the front-end experience, and little more.

 

End-to-end Onboarding

 

According to research by CEB Tower Group, a client onboarding solution in Wealth Management needs to consist of 3 things:

1) Digitized, intelligent forms

2) Integrated data that can pre-fill forms from internal and external databases

3) E-Signature capabilities that allow the client onboarding process to be completely paperless

 

Without all 3 components, you’re not solving your onboarding problem (Source: CEB Tower Group, E-Signature Solutions Market Overview). Statistically, Banks and Wealth Management firms that implement a digital signature solution by itself have given a collective shrug to the benefits of e-Signature. In a survey of North American Wealth Management firms, only 38% of IT Executives said they have gotten “high value” from their digital signature solution. And 32% of executives said their digital signature solution actually posed a risk to their organization, due to the fact that, on its own, digital signature can’t scale with a growing firm (Source: CEB Tower Group, Digital Signature Software, 2016)

 

And yet, in another poll conducted by CEB, 88% of wealth management firms said they have made it their number one priority to improve client onboarding, from front to back-office.

 

What’s going on here? Why the disparity?

 

From Front to Back-Office

 

Wealth firms are starting to realize that if you want to improve the client onboarding process, you have to improve the whole thing, from front to back office.

 

Imagine if the passport-issuing office wanted to improve the experience of getting a new passport. Normally, you go in to the office, fill out a stack of paper forms, then wait for a few weeks, and get your passport in the mail. Instead, they decide to change the way you fill out those forms. You can now do the whole thing online, surely a big step forward. But it still takes you weeks to get it back in the mail, and still strands thousands of travelers a year. It’s a marginal improvement, but doesn’t save the organization much money, and doesn’t remove the biggest bottleneck for the customer, which is getting the passport in the mail.

 

Bottlenecks in Wealth Management

 

This type of analogy illustrates how wealth management firms, and their clients, feel about the onboarding process. The digital signature is nice, but what they really want is to get up and running faster. Digital signature is an absolutely critical component of the whole process (if it wasn’t, we wouldn’t make it an essential component of our platform). However, by itself, it is not an onboarding solution.

 

Some of the most expensive bottlenecks in the wealth management onboarding process include:

  • Inefficient KYC/AML checks (and regular updates)
  • Opening additional accounts for existing clients and their family members
  • Transferring client data between departments
  • Advisor use and re-use of client data
  • Data entry
  • Pulling client data to make product recommendations
  • Creating audible records that demonstrate the Who, When, Where, Why, What of client onboarding

 

And yes, dealing with paper forms with their many mistakes, and getting them signed in a timely manner by all stakeholders.

 

Conclusion

 

Client onboarding is a complex business process that touches everyone from the client to the advisor, to the middle and back-office staff (and many systems along the way). Ultimately, what your clients care about is getting onboarded in a timely manner, with a digital experience. And what your firm values is creating more efficient processes that save time and money, that free the advisors up to do what they do best (not chasing paperwork), and that engages and retains clients.

 

If you are thinking of implementing a digital signature at your wealth management firm, remember the 3 essential onboarding components outlined by CEB:

1) Digitized, intelligent forms

2) Integrated data that can pre-fill forms from internal and external databases

3) E-Signature capabilities that allow the onboarding process to be completely paperless

 

If you want to learn more about creating a totally paperless client onboarding process in your wealth management firm, download our Guide to Paperless Onboarding in Wealth Management. It will walk you through step by step how to get started in moving from paper to digital, from front to back-office.