Asset Management Firms Waste Valuable Time and Money with Manual Processes

By Kevin O’Neill, Fenergo

With so much discussion about cutting edge financial technologies, you’d be forgiven for thinking the entire financial services sector is completely high-tech. But the truth is, much of the industry is still heavily bogged down by manual processes.

Financial institutions can spend anywhere from two weeks to an extraordinary 34 weeks onboarding any given client. It’s a time consuming, and arguably superfluous process, which often entails duplicating information requests to investors. In fact, a recent Forrester report found that clients are contacted on average a staggering 10 times during the onboarding process and asked to submit up to 100 documents throughout the process.

Unsurprisingly, the same report states banks have lost deals due to their cumbersome onboarding process.
And it’s not just time consuming. The report also showed that financial institutions spend an average of $6,000 onboarding new clients (with some having spent as much as $25,000). So isn’t it time for asset managers to start saving time and money through streamlined onboarding?

Automating efficiencies
Emerging technologies have the power to revolutionize the way asset managers conduct client onboarding procedures across their organizations. The drive towards digital transformation is led by the need to tackle two of the biggest operational challenges that buy-side firms currently face – onboarding and lifecycle management.

Through automating client onboarding, asset managers can alleviate the pain points associated with a manual onboarding process. By increasing transparency, enhancing visibility into client profiles, centralizing and improving data quality and improving inter-institutional data sharing, asset managers can achieve a single-client view to streamline the entire process. Not only will this improve the client experience for faster onboarding and opportunities for revenue, but huge efficiencies will also be gained from a productivity perspective, allowing asset managers the freedom to re-allocate employees to more value-added and revenue-generating tasks within the business.

One example is Optical Character Recognition (OCR); a software which allows a financial firm to absorb and machine-read information, removing the need for manual input and reducing operational inefficiencies. Blockchain technology is also set to take the world by storm.

Clients also want to be self-sufficient. They need to be empowered with automation made simple, through self-service channels.

Putting theory into practice
When it comes to digital transformation, it’s not just about talking the talk. There are practical ways to implement new and emerging technologies in order to increase efficiencies and remove the manual processes currently in place.

Buy-in and communication are key to success with any digital implementation, and it’s important for buy-side firms to foster a feeling of co-creation and collaboration amongst stakeholders and employees for best success. Of course, this isn’t always an easy shift, but it is essential to bring all the different functional siloes together. To achieve success in the digital client journey, asset managers need to be realistic on where they are in the process, have a clear vision on where they are going, then be pragmatic and realistic in their goals over a fixed time frame.

Digitalizing the Client Lifecycle Management (CLM) program can bring many and varied benefits for an organization. There are savings in the total cost of ownership thanks to the reduction in fragmentation. Plus, asset managers can experience significant reductions in compliance costs, operational overheads and headcount.

When it comes to investing in and implementing client onboarding as part of CLM, asset managers need to consider the following:

• Spend time upfront building a strategy. What purpose will CLM serve in your institution, how will it complement your broader organization?
• Analyze your current state. Invest in understanding what shape your data is in and what your processes and policies look like. You can then harmonize your data and develop a target operating model that supports your strategy.
• Nominate a product owner. The person who owns the system ensures the bridge between the sponsor’s vision and the people working on the ground, prioritizing decisions as you implement common standards. Until the CLM is stable and an automatic part of the business, the product owner nurtures and protects the CLM process, helping it successfully embed throughout the organization.

Buy-side firms need to embrace technology along with the benefits of digital transformation. This is the year of the customer experience and every asset manager will need to make major inroads in this area or risk getting left behind.

Kevin O’Neill, Global Head of Buy-Side Division
Kevin O’Neill joined Fenergo as the Global Head of its Buy-side Division in June 2018. Kevin has a successful and proven track record as an institutional business development executive that spans more than 25 years. He has driven new revenue growth across various Asset Servicing, Asset Management and Wealth Management businesses. Kevin was formerly Head of the U.S. Asset Manager segment for Royal Bank of Canada’s Investor & Treasury Services (RBC) where he was responsible for the growth of business with a focus on U.S. Asset Managers, Financial Institutions, Private Equity & Real Estate Managers. Prior to that role, he was RBC’s Head of the Sovereign Wealth Fund (SWF) & Central Bank business segment, covering the largest institutional investors in Asia, the Middle East, Latin America and Europe.

Kevin joined RBC I&TS from Mellon Financial Corporation (MFC) in which he was responsible for marketing MFC’s offshore Fund Services to major global Asset Managers. Prior to joining Mellon, he worked at Bank of Ireland Asset Management (BIAM) in Ireland and the US with a focus on Private Banking & Asset Management business development activities.

Kevin holds a Bachelor of Arts Degree in Financial Services (Honours) from University College Dublin and has numerous relevant diplomas from the Institute of Bankers, Ireland. Kevin is also a Certified Investment Fund Director (The Institute of Banking).

Kevin’s LinkedIn profile can be found here:
https://www.linkedin.com/in/kevin-o-neill-67b9861a/