It’s a question no doubt asked by many private wealth and high net worth clients, writes Adrian Akers, global head of strategy and innovation at TrustQuay.
In an age where challenger banks are now able to prove identity, check addresses and meet KYC and AML requirements in minutes, why does it still often take days for private wealth, trust and corporate services providers to perform the same function?
Well, the problem is caused by a vicious circle of regulation and process – over recent years the regulatory requirements have risen massively, but the still largely manual processes associated with onboarding have been unable to step up. As a result, onboarding has become an increasingly onerous task for firms and a potential source of frustration for new clients.
A smooth onboarding experience is a very important first step in developing a positive client relationship at the get-go. Research conducted by our identity partner GBG has shown that 75% of online registrations are abandoned if clients become frustrated with an onboarding process.
While quick and seamless onboarding should be a business goal under all circumstances, with the current restricted environment under coronavirus the ability to remotely verify clients has perhaps never been more important.
The need for accelerated digitalisation
Firms are now coming under intense pressure to rapidly modernise and digitalise their business models in order to remain competitive and meet the expectations of clients.
The problem stems from many firms still having multiple disconnected legacy systems and tools that don’t work consistently across functions or locations. They simply don’t have a platform that combines both the strong core functional capabilities, with the necessary APIs and off-the-shelf integration leading tools that will provide them with agility and flexibility in the digital age.
As a result, the industry lags behind other financial services markets, often relying on old fashioned, manual and labour-intensive working practices.
In parallel with this, the intergenerational transfer has meant that wealth is now under the control of ‘digital native’ generations with much higher expectations of user experience in particular from ‘the front office’ perspective.
Clients have therefore become more sophisticated, and expect the technology, speed of response, engagement and client service they are experiencing in other industries. Expectations have risen massively and for areas like onboarding they expect this to happen in hours, not the days currently required by those firms with old school paper processes.
The real challenge for firms is the need to not only play catch up, but to provide levels of service and client experience on par with the best-of-breed in financial services.
Digital onboarding will soon become the norm
In order to meet the requirements of regulators by verifying that you’re genuinely dealing with the person the client claims to be, two key tests are required – proof of identity and verification of address.
For proof of identity, the ability to scan documents and automatically upload all information onto your system can significantly reduce human error from manual inputting or the risks of missing out key data.
Checking that documents are genuine is also critical. Even with training, it’s difficult to spot for example if a Singapore driver’s license or a Saudi Arabian passport is a high-quality forgery. By digitally assessing the validity of forms of ID by comparing to databases of real documents, manipulation checks can flag up any design or data anomalies that look out of place, far surpassing what is possible with the human eye to detect documents that have been forged.
In instances where documents are genuine but are not those of the fraudster, a selfie can be used to match the applicant to the identity documents. Here, you can run biometric validation of facial features between the printed document, such as a passport photo, and a live image captured on a smartphone, tablet or webcam.
A liveness check then verifies that the person using the device is in fact live and not just a static image and that they match the presented ID document.
Finally, having checked identity, the second key test is verification of address. To do this, APIs are used to access credit reference agencies, government databases, electoral rolls, mortality lists and ‘change of address’ registers to check whether the client actually lives at the address he or she claims.
Tech already here
While this whole process sounds extensive, it actually only takes minutes to work from ID scan, into document examination, face matching and through to address checking.
So why isn’t onboarding easier? Good question, because the technology is already here in the private wealth, trust and corporate services market to provide a better experience for clients, a more efficient process for firms and a fully audited trail for regulators.
This article has been written for International Adviser by Adrian Akers, global head of strategy and innovation at TrustQuay.