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Wealth management firms haemorrhage clients due to lack of digital advancement

Almost one-third of wealth management firms take over four weeks to onboard new clients, with 9 out of 10 firms lacking self-service options for younger customers

17 September 2019 – Wealth management firms globally are struggling to onboard new clients within four weeks for a standard High Net Worth Individual (HNWI). New research of global wealth management practitioners by Fenergo, a leading provider of digital Client Lifecycle Management (CLM) solutions, reveals that onboarding times have increased over the past five years, disappointing the expectations of younger investors. Regulatory requirements around Ultimate Beneficial Ownership (UBO), Politically Exposed Parties (PEPs), sanctions, watch lists and Anti-Money Laundering (AML) obligations are hindering the onboarding process for firms that haven’t digitally transformed their processes.

Key insights from this global survey include:
• Over half (52 percent) of wealth managers are concerned about losing clients due to dropouts during their poor onboarding experience
• The majority of wealth management firms (80 percent) admit having made poor to no progress in achieving integrated, straight-through onboarding processing
• Regulatory requirements are hindering onboarding with more than half (55 percent) suffering serious cross-border compliance pain. In fact, one-third of firms still have not integrated global AML or Know Your Customer (KYC) rules into their onboarding methods
• Almost a quarter (22 percent) of wealth managers have not integrated international tax compliance into their onboarding procedures, despite rising requirements
• More than half of wealth managers (60 percent) struggle to integrate external data sources, while four in 10 still haven’t integrated with KYC/AML systems and 28 percent have not integrated global rules
• Despite the complexities of onboarding currently, 40 percent of respondents are focusing on implementing an end-to-end digital onboarding system by 2021

“In the past five years the sector has failed to transform sufficiently and its now impacting wealth managers and clients alike, except this time round clients are taking their money elsewhere,” says Steve D’Souza, Global Head of Private Banking and Wealth Management at Fenergo. “Onboarding clients in 2019 should be a pain-free process. We live in a world where you can now open a bank account with a selfie, so firms need to consider if their onboarding technology is good enough to support the retention of assets as wealth transfers to the next generation.”

Alois Pirker, Research Director, Wealth Management, Aite Group, said: “Ever-growing expectations from investors have driven client experience considerations to the fore. Firms need to be re-thinking and re-engineering their onboarding processes if they want to attract the next generation of investors. With the right technology, we’re starting to see some firms make inroads in making onboarding a pleasant experience”.
To dig deeper into the research findings, register here to join the live webinar, The Shocking Truth about HNW Client Onboarding in Wealth Management, on October 22nd at 3.30pm BST (10.30am ET)

Notes to editors
Research was commissioned by Fenergo and conducted by WealthBriefing, the premier news, features and information source for the global wealth management sector. This study is based on a global survey of 82 wealth management practitioners carried out in April 2019. Steve D’Souza was quoted in the Cap Gemini World Wealth Report 2019, click here to read the full report.

Fenergo (
Fenergo is the digital enabler of client and regulatory technology for financial services. It provides Client Lifecycle Management (CLM) software solutions for Financial Institutions including; Corporate & Institutional Banking, Commercial & Retail Banking, Asset Management, Private Banking & Wealth Management. Counting 70 global Financial Institutions as clients, its award-winning CLM suite transforms how Financial Institutions manage clients; from initial onboarding to KYC/AML and regulatory compliance, to client data management and ongoing lifecycle KYC reviews and refreshes. Fenergo CLM empowers financial institutions to deliver a faster, more efficient and compliant client experience and achieve a single client view across channels, products, business lines and jurisdictions.
Fenergo’s community-based approach to product development allows clients to collaborate on solution design on a global scale. Its rules-driven solution ensures compliance with multiple global and local regulatory frameworks including AML, KYC, Tax (CRS, FATCA, 871M), OTC Derivatives (EMIR, Dodd-Frank, MiFID II, Margin Requirements) and data privacy rules (GDPR). It supports the collection, centralization and sharing of client and counterparty data and documentation across the institution and deploys an API-first approach to advanced integration with a host of external KYC, AML and entity data providers, KYC and industry utilities. The solution is underpinned by next generation Artificial Intelligence, Robotics Process Automation and Machine Learning technologies, using advanced OCR and NLP capabilities to extract information, expedite compliance and improve operational efficiencies.