Start Smart: Using Data to Streamline the Client Onboarding Process

Client onboarding is the gateway to a financial institutions’ (FIs) relationship with their customers. When done right, it fosters trust, ensures compliance, and accelerates revenue. However, common and wide-spread inefficiencies create customer friction, delays, and regulatory risks. Leveraging data effectively, from the start, is critical to onboarding success.

The Challenges of Onboarding Data

One of the biggest challenges in client onboarding is effective data collection. Front-office teams, such as sales and relationship managers, are the first line of defense when it comes to onboarding new clients or accounts, but they often lack the tools to efficiently source required Know Your Customer (KYC) information. To keep unsuitable clients and bad actors from being onboarded at FIs, data-led KYC programs are imperative. 

Many front office teams use publicly available data to satisfy collecting and verifying the necessary KYC information – however this is often done in a tedious manual manner, often delaying onboarding and diverting the team’s focus away from generating new business. Manual data processes are error prone for many reasons, and in worst case scenarios, the wrong entity could be onboarded entirely, causing unforeseen risk and major delays. Manual KYC data collection often forces institutions to repeatedly request information from clients that could have easily been publicly sourced, creating unnecessary friction and degrading the overall client experience.

To help address these data challenges, some institutions place client onboarding specialists within the first line alongside sales teams. While this may improve compliance oversight, it shifts the burden without solving the root issue—manual data sourcing. Each added manual step increases delays, impacting time to revenue and client rapport, not to mention the potential operational and regulatory consequences of poor data practices.

Why Data in Customer Onboarding Matters

Strong data integrity and accessibility are essential for efficient onboarding. Poor data collection leads to outdated records, compliance gaps, and regulatory scrutiny. A well-structured data strategy enables a strong KYC program with accurate risk assessments and better client experiences while reducing unnecessary client touchpoints. 

To realize the full benefit from technology solutions and automation, FIs need the right data and processes. In this AI-driven era, automation holds promise but depends entirely on reliable data. With a focus on transparency, regulators increasingly offer API connections to simplify access to their verified data stores. This offers direct reliability from an approved golden source. Such advancements enable onboarding that is smarter, not harder, ensuring compliance while maintaining operational efficiency. These are the fundamental ingredients to a promising AI-powered perpetual KYC (pKYC) process. 

What Good Data in Onboarding Looks Like

Ongoing data sourcing from approved sources keeps records accurate beyond onboarding. A client regulated today may not retain that status in the future, and waiting for periodic reviews to uncover a status change can lead to breaches in compliance. Many regulatory fines stem from outdated records, missing information, or backlogged periodic reviews.

Integrating ongoing data links from approved sources allows firms to maintain accurate, real-time records and improve compliance outcomes. This proactive approach reduces the risk of “dirty data,” enhances compliance, and promotes a successful onboarding process. 

A “start smart” strategy focuses on capturing the right data at the right time. Speed, accuracy, and efficiency early in the process determine whether an institution secures a client or loses new business to a competitor. Most importantly, effective data practices prevent engagement with bad actors, reducing compliance risks from the start.

Conclusion

Rather than a bottleneck, client onboarding should be a strategic advantage. FIs must adopt a data-driven strategy to streamline onboarding, improve compliance, and enhance customer experience. Using automation, readily available data highways, and continuous updates transform onboarding into a key competitive differentiator and the fundamental building block for a comprehensive pKYC program. 

To learn more about transforming Onboarding into a competitive advantage, visit X-Sight Onboard | NICE Actimize.