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Over Half of Salespeople in Banking Spend 27% of Their Working Week Onboarding New Client Organizations

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Over Half of Salespeople in Banking Spend 27% of Their Working Week Onboarding New Client Organizations

GLEIF publishes new research findings on the challenges of entity identification in financial services and proposes a standardized way forward

Basel – Six in 10 (57%) senior salespeople in banking spend more than 1.5 days of their week (27% of their working week) onboarding new client organizations, according to research findings published today by the Global Legal Entity Identifier Foundation (GLEIF). The research also found that 50% of financial institutions use, on average, four identifiers to help identify client organizations. The data supports GLEIF’s view that replacing disjointed information with a globally accepted approach based on broad adoption of the Legal Entity Identifier (LEI) would remove complexity from business transactions and deliver quantifiable value to financial services firms.

In a survey of over 100 senior salespeople in the banking sector in the UK, US and Germany, the process of client onboarding, including know your customer (KYC) due diligence, was shown to take six weeks, on average. This length of time spent onboarding creates a significant burden; salespeople have less time to work on their core focuses, such as acquiring new business and servicing existing clients.

Other key findings include:

  • 57% of respondents agree that reliability of reference data is a challenge
  • 55% of respondents agree that the resourcing of onboarding is a challenge
  • 55% of respondents agree that lengthy processes mean risk of business loss
  • 61% of respondents agree that digital technology will further complicate the process

Stephan Wolf, GLEIF CEO, comments: “Our research results show that the onboarding process for new business relationships in financial services is too time-consuming and requires too much administration. In a globalized digital economy, verifying the identity of customers, partners and suppliers is becoming an increasingly complex and costly challenge. However, the growth of identifiers is leading to problems that must be resolved to assure their vital place in oiling the wheels of the growing global digital economy.”

The burden continues even once the client is established. Client data must be kept up-to-date throughout the business relationship. This includes regular verification of business card information and changes to the ownership structure.

The research identified that the crux of the problem is the lack of a standardized approach to legal entity verification. As a result, 54% of respondents agree that the use of different legal identifiers for the same legal entity leads to inconsistencies with updates to different reference data sets. The research found that 58% of those surveyed said that the associated reference data is not up-to-date, while 46% said reference data from different sources is inconsistent and 49% said the same ID is used for different legal entities.

Wolf adds: “Identifiers of legal entities are easily obtained from a host of different issuers but are not kept up-to-date in a systematic way. Organizations need a more efficient system for legal entity identification. Some think technology will help but there is no general consensus about what the solution should be.”

”At GLEIF, we are convinced that financial services businesses can save time, gain greater transparency, and work in a more streamlined fashion by adopting an LEI for each client organization,” says Wolf. “Banks operate in multiple jurisdictions and therefore need a global standard. The LEI offers businesses a one-stop approach to identifying legal entities, which has the potential to take the complexity out of business transactions. Via the Global LEI Index, we make available the largest online source that provides open, standardized and high quality legal entity reference data. No other global and open entity identification system has committed to a comparable strict regime of regular data verification.”

Wolf concludes: “Integrating the LEI into other entity verification methods, including solutions based on digital certificates and blockchain technology, will allow anyone to easily connect all records associated with an organization and identify who owns whom. By becoming the common link, the LEI will provide certainty of identity in any online interaction, making it easier for everyone to participate in the global digital marketplace.”

The report titled ‘A New Future for Legal Entity Identification’, which details the results of GLEIF’s research into client identification in financial services, is available on the GLEIF website.

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Boeing, hit with $6.6 million FAA fine, faces much bigger 787 repair bill – sources

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Boeing, hit with $6.6 million FAA fine, faces much bigger 787 repair bill - sources 1

By Eric M. Johnson and David Shepardson

SEATTLE/WASHINGTON (Reuters) – Boeing Co will pay a $6.6 million to U.S. regulators as part of a settlement over quality and safety-oversight lapses going back years, a setback that comes as Boeing wrestles with repairs to flawed 787 Dreamliner jets that could dwarf the cost of the federal penalty.

Boeing is beginning painstaking repairs and forensic inspections to fix structural integrity flaws embedded deep inside at least 88 parked 787s built over the last year or so, a third industry source said.

The inspections and retrofits could take weeks or even up to a month per plane and are likely to cost hundreds of millions – if not billions – of dollars, depending to a large degree on the number of planes and defects involved, the person said.

The Federal Aviation Administration said Boeing had agreed to pay $6.6 million in penalties after the aviation regulator said it failed to comply with a 2015 safety agreement.

The penalties include $5.4 million for not complying with the agreement in which Boeing pledged to change its internal processes to improve and prioritize regulatory compliance and $1.21 million to settle two pending FAA enforcement cases.

“Boeing failed to meet all of its obligations under the settlement agreement, and the FAA is holding Boeing accountable by imposing additional penalties,” FAA Administrator Steve Dickson said in a statement. Boeing, which paid $12 million in 2015 as part of the settlement, did not immediately comment.

Boeing engineers are working to determine the scope of inspections, including whether jets can be used as-is without a threat to safety, two people said. Boeing has not told airlines how many jets are impacted, another person said.

The FAA has been investigating instances of oversight lapses, debris left inside finished aircraft, and managers putting pressure on employees handling safety checks for the FAA, people familiar with the proceedings said.

For example, in August 2020, Boeing told to the FAA about the flaw involving structural wrinkling in the interior fuselage skin where carbon-composite barrels that form the plane’s lightweight body are melded together.

But the defect went unnoticed for months or longer because computerized safeguards that crunch data looking for quality flaws had not been programmed to look for the gaps, a third industry source said.

DELIVERY TARGET

The 787 production problems have halted deliveries of the jet since the end of October, locking up a source of desperately needed cash for Boeing.

The fuel-efficient 787 has been a huge success with airlines, which have ordered 1,882 of the advanced twin-aisle jet worth nearly $150 billion (74.7 billion pounds) at list prices.

But the advanced production process and sprawling global supply chain caused problems over the years.

As of February, Boeing had fixed the 787 production process causing the wrinkling defect, according to two people familiar with the matter.

However, planes rolled off the assembly line with the flaw for more than a year, at least, continuing even after the flaw was discovered in August 2020.

“It’s difficult to see a definitive fix that is agreeable by the aviation authorities and all going forward,” Boeing customer Air Lease Corp’s CEO John Plueger told analysts on an earnings call Feb 22. “I don’t think that we’re there yet.”

Boeing has been working on the fuselage problem, and two additional potentially hazardous defects that arose since 2019, as it charted plans to consolidate final assembly of the 787 in South Carolina starting next month, at a sharply reduced rate of 5 787s per month.

One senior supply chain source said they will have to cut rate again.

Boeing said last month it expects to resume handing over a small number of 787s to customers later this quarter.

It has an ambitious internal plan to deliver 100 of the jets this year, one person said. Analysts say deliveries are not expected to recover to 2019 levels until at least 2024.

‘OPEN-HEART SURGERY’

But before any jet is delivered, it must go through invasive inspections and costly repairs.

First, technicians must pull out the passenger seats, open up the floor paneling and use specialty tools to measure whether defects invisible to the naked eye are present, according to three people with direct knowledge of the process.

The repair work – already underway at Boeing factories in Everett, Washington and North Charleston, South Carolina – is even harder.

In the bowels of the jet, technicians have to remove multiple specialty fasteners on both sides of the inner fuselage skin, then install newly produced “shims” that fill out gaps and remove the structural dimpling. Workers then replace all the fasteners, re-paint, and re-install the interior, they said.

“It’s like open heart surgery,” one of the people said. “They’ll be retrofitting the fleet for potentially several years.”

(Reporting by Eric M. Johnson in Seattle; Additional reporting by Tim Hepher in Paris, David Shepardson in Washington, and Tracy Rucinski in Chicago; Editing by Nick Zieminski)

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On a retro style milk truck, London entrepreneur chases a ‘zero waste’ future

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On a retro style milk truck, London entrepreneur chases a 'zero waste' future 2

By Natalie Thomas

LONDON (Reuters) – Heralded by the whirr of its underpowered electric engine and the clink of bottles stacked in crates on the back, Ella Shone’s ‘Topup Truck’ started life ferrying morning milk to the doorsteps of bleary-eyed Londoners.

Twenty years on, and the light vehicle known as a ‘milk float’ – once a ubiquitous sight on British streets – is enjoying a second career selling a range of goods and serving the 32-year-old’s quest to rid the city of single-use plastic.

“The fact that I’m driving around in a milk float does a lot for raising awareness in the local area,” said Shone, wearing a black beanie during her rounds in the borough of Hackney last week. “So now I’m operating at almost full capacity.”

Furloughed from her sales job during the coronavirus pandemic last spring, Shone used savings to start her new business, aiming to meet growing demand for household goods free of the plastic packaging used in supermarkets.

Customers book a visit from the ‘Topup Truck’ online and then purchase goods such as lentils, pasta, olive oil, shampoo or washing up liquid using their own containers.

From a low base a decade ago, the market for such unpackaged bulk goods could hit at least 1.2 billion euros ($1.5 billion) by 2030 in the European Union, according to a report https://zerowasteeurope.eu/wp-content/uploads/2020/06/2020_06_30_zwe_pfs_executive_study.pdf by Zero Waste Europe, an anti-waste network.

While handling the logistics can be a challenge, Shone calculates that her service has eliminated the need for at least 12,700 pieces of plastic since it launched in August.

Planning a crowdfunder to retrofit her milk float to enable her to serve a greater range of products to more communities, Shone hopes her novel approach will inspire others to find creative ways to tackle waste.

“If we want to have real change, it has to be a collective effort,” she said.

($1 = 0.8218 euros)

(Writing by Matthew Green, Editing by Rosalba O’Brien)

 

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Lufthansa adds more summer holiday destinations in bet on recovery

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Lufthansa adds more summer holiday destinations in bet on recovery 3

BERLIN (Reuters) – Lufthansa is adding more holiday destinations to its summer flight schedule from Germany in anticipation of a strong rebound in bookings, it said on Thursday, betting COVID-19 vaccines and testing will soon make vacation travel possible.

Germany’s largest airline said it was planning to add around 20 new destinations from Frankfurt and 13 from Munich to locations such as the Caribbean, the Canary Islands and Greece.

COVID-19 vaccines and testing, along with strict hygiene rules at airports and on planes, will be prerequisites for travel this summer, it said.

“We expect many countries to relax travel restrictions towards the summer as more and more people have been vaccinated,” Lufthansa board member Harry Hohmeister said in a statement.

Hohmeister said the airline, which secured a 9 billion euro ($11 billion) state bailout last year, expects a sharp increase in demand once restrictions are lifted.

Concerned about more transmissible coronavirus mutations, many European Union countries have reinstated border controls in what is normally a passport-free travel zone.

“There is a great yearning for travel and we believe that the summer months will reflect this,” Hohmeister added.

In Britain, holiday bookings soared this week after the government laid out plans to gradually relax coronavirus restrictions, giving battered airlines and tour operators hope that a bumper summer could come to their rescue.

Plans for relaxing coronavirus travel restrictions have not been announced yet in Germany. Chancellor Angela Merkel is due to discuss lockdown options with the head of the regional governments next Wednesday.

Lufthansa, which said in January it was losing a million euros every two hours, is due to publish its fourth quarter results on March 4.

($1 = 0.8187 euros)

(Reporting by Riham Alkousaa and Ilona Wissenbach. Editing by Mark Potter)

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