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Ian Hallam

The automation of the client onboarding process has long been discussed, but the technology now exists to change the way wealth managers operate in this area writes Ian Hallam, CEO, 3i Infotech (Western Europe).

Client onboarding involves a high proportion of manual processes that create an environment for operational and compliance risks. Initial checks such as proof of identity and anti-money laundering are followed by a series of portfolio management rigours. Wealth managers must also bear in mind the FCA requirements applicable to firms providing investment advisory and discretionary portfolio management services.

Ian Hallam

Ian Hallam

A fundamental part of the process is the creation of the client’s risk profile. This is a complex and often lengthy procedure. Establishing the risk profile usually involves the client manually completing a questionnaire – sometimes in a face-to-face meeting.

It soon becomes evident that if the wealth manager gets the onboarding process correct then there is every likelihood that it will commence the client relationship strongly, with no compliance risks and a clear mutual understanding of the portfolio’s goals. Getting it right, however, is often not that easy,

Improved end-investor servicing

Needless to say this is a costly process for the wealth manager. Typically, wealth management firms will involve many staff (working in various departments that may also be using several different systems) to onboard a client. Multiply these costs by the number of clients being onboarded throughout the year and one can rapidly see why this area presents such an opportunity for greater efficiencies, thereby allowing increased capacity for improved end-investor servicing.

As far as the end-investor is concerned, onboarding can also sometimes be a challenging time. Clients can be frustrated by some aspects of the experience, including answering the same questions repeatedly, not knowing the status of their new accounts, and having their assets tied up in delays rather than earning valuable income. Is it possible that far more of this onboarding process could be streamlined?

Enabling wealth managers to target clients even more effectively

In today’s wealth management world, Heads of Operations and Compliance should be able to use process control screens and other business process management (BPM) tools to view how far along the onboarding pathway the client has travelled and to spot any potential blockagesbefore they occur.

Additionally, if the wealth management firm has integrated its back office system with a centralised database, the data can then be automatically channelled to all the other relevant applications once the onboarding process has been completed.

Systems architecture like this will also enable wealth managers to target clients even more effectively. With all this data gathered and stored centrally, it could be used on an on-going basis to more effectively tailor the service to the end-investor. In this way, clients can decide between paper reports versus mobile updates; how frequently and in what situation would they like to be contacted; and so on. BPM tools can therefore be applied to control and manage – not just to onboard.

The problem with most business process management (or ‘workflow’) tools is that they are not contextualised for the industry in which they are being deployed, be it wealth managers, institutional asset managers or hedge funds. The functionality therefore exists, but the wealth manager’s IT team still has to do some bespoke systems development around the workflow tool to make it suit the client base.


Of course, there are other benefits that can be accrued from automating the client onboarding process. For example, some of the recent thematic reviews from the Financial Conduct Authority have focused on the lack of effective, enhanced ongoing monitoring of high-risk persons. This has led to subsequent enforcement actions, where failings in firms’ systems and controls in this area have been identified.

A reduction in manual interventions would reduce operational and regulatory risk, generate goodwill from the investor and also garner efficiencies and cost savings for the wealth manager – delivering the capacity for growth. In this way, an efficient onboarding process can assist in retaining clients and winning new business.

Global Banking & Finance Review


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