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Onboarding Process in Business Banking
Onboarding Process in Business Banking
Banks don’t always use the available technology
to reach their full potential and one of the areas where this is noticeable is in the onboarding process for corporate clients. Current onboarding involves a lot of work by the client and costly, complex banking processes. Financial institutions have the capability to use innovative technology to improve the onboarding of corporate clients. With the help of technology, the onboarding process can be more economical, faster, accurate and simple. It is to the financial institution’s advantage to complete the onboarding of business clients as quickly as possible as only then can the client start using his account and the banking services thus generating fees for the bank.
Banking Starts with Onboarding
The importance of onboarding is becoming more and more apparent. Regulators recognize the onboarding process as a way for financial institutions to know their customers, weed out unwanted criminal elements and have procedures in place to give them the insight into the client that they may need in the future. If adequate due diligence is done during the onboarding process banks can avoid legal risks, loss of reputation and operational mistakes which could significantly harm the bank in the future.
Together with the regulations that banks need to meet during the onboarding of corporate clients and the procedures that must be carried out meticulously clients also want the onboarding to be smooth, easy and convenient. A positive onboarding experience can strengthen the financial institutions relationship with its clients while also implementing safeguards to prevent risk including KYC, Beneficial Ownership Verification, Due Diligence, etc.
Online Corporate Onboarding
Time and money can be saved by getting new corporate clients to do the initial form-filling online before making a trip to the bank. You can still communicate with the new client via online systems just as you would if they had to make several trips to the bank’s physical address. Face-to-face encounters and over-the-phone conversations are important but there are systems online which can still give the client the personal touch, for example live chats. Busy business professionals will appreciate the time online onboarding will save them.
The benefits of online onboarding include saving expensive manpower; a faster onboarding process; fewer lengthy meetings; less use of paper and perhaps most importantly this sends a message to the client that the bank is technically orientated and a bank of the future.
Risk Mitigation Processes During Corporate Onboarding
Anti-money laundering (AML) processes are designed to prevent financial crime and reduce risk. AML processes include regulations, directives and guidelines. The nature of banking and the finance industry in general makes it vulnerable to elements with criminal intentions including money-launderers. By installing AML procedures during the onboarding process banks can prevent breaches of legal requirements before even opening an account for new clients.
Anti-Money Laundering Processes During Online Onboarding
Digital onboarding systems can determine AML risk and calculate the potential client’s risk rate – read here – what makes a company high risk. Risk factors typically include the total assets being managed by the bank; the jurisdiction where the company was registered and incorporated; the company’s industry; nationality of company owners; purpose of the bank relationship; negative media and PEP matches. Of course there are other additional risk factors taken into account but the important point is that online onboarding can accomplish efficient and accurate AML.