New regulations to prevent money laundering are part of the reason why wealth management firms are struggling to onboard their clients fast enough and risk losing them.
That is according to new research from Fenergo, a RegTech company. Having commissioned the survey of 82 wealth management practitioners, it found that onboarding times have increased over the past five years due to new legislation regarding ultimate beneficial ownership, anti-money laundering (AML) and politically exposed parties.
A majority of 55% said they struggled to onboard new clients because of the new regulations. One in three said they had so far failed to integrate global AML or know your customer (KYC) rules into their onboarding process.
The result is that 52% of wealth mangers fear that they may lose clients due to poor onboarding processes. Moreover, 80% stated that they had made poor or no progress in achieving integrated onboarding processing.
“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.”
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