How you can take control of CLM

Find out what good customer lifecycle management looks like in a financial services firm and why it's important to growing your business, building relationships and managing risk.

Posted by: 
Oliver Malmed
Mar 25, 2020

March 25, 2020

The concept of integrated customer lifecycle management (CLM) in Financial Services is something that has gathered pace in terms of popularity in recent years. It's a more holistic approach to KYC and risk management.

Businesses are facing serious challenges right now when it comes to acquiring new customers and keeping them for long enough to maximise profitability. So, CLM is a positive approach to customer acquisition and retention, as well as risk management.

Manage the operating environment

The importance of CLM to financial services is increasing all the time. Financial uncertainty and greater customer choice is making it harder for firms to attract new business and retain it.

New entrants, declining profit margins and increasing client expectations are upping the stakes. Customers expect businesses to tailor products and interactions to their individual needs.

This starts with seamless onboarding right at the start of the relationship and continues right through to the point at which a client is off-boarded. Good customer experience is essential to maintaining a good reputation across social media and beyond.

In this operating environment, Financial Services firms have to deliver products that are simple to sign-up for, that are responsive, and provide good value. The product, the experience of getting it, using it and leaving it behind needs to show the firm understands what customers want.

Building better relationships

Managing customer relationships isn't new for Financial Services firms. However, numerous manual processes coupled with disjointed legacy IT systems can make relationship management cumbersome and time consuming - especially at the onboarding stage. The relationship can kick-off on a sour note, which lingers in the memory and is best avoided.

CLM, with automated onboarding checks, discreet risk management and integration with other CRM solutions can be a powerful tool for firms. It can support good customer experiences, while managing risk, which builds better relationships and brand loyalty.

Start with onboarding

Customer onboarding processes in the financial sector have to navigate numerous obstacles on the way to completion. Sufficient data has to be acquired on individuals or firms from different sources to set up an arrangement - the Know Your Customer (KYC) or Know Your Business (KYB) process.

Acquiring this data needs to be smooth, seamless and swift to create a good experience for new customers, ensuring they don't abandon their application. But it also needs to be robust to protect against fraudsters.

To fulfil compliant onboarding, firms complete different KYC/KYB checks, and in some instances Enhanced Due Diligence, such as PEPs and sanctions checks. When EDD is needed, it's still really important to make the communication with new customers easy and efficient, while still separating out applications made by 'bad actors'.

All the checks you need to make can be automated and EDD managed within a CLM software that has a central-risk engine and integration to different data providers. This starts the relationship with new clients off on a positive footing.

Factor in regulators

Against this backdrop, firms also have to manage the demands of regulators. As well as measures to detect and prevent financial crime, many firms have to comply with rulebooks across several jurisdictions and cope with audit or reporting requirements.

While firms are grappling with the challenge of writing and retaining profitable business, regulators are focused on AML and other compliance measures, which can leave firms looking forward and backwards at the same time.

Again, in the area of activity tracking and auditing a CLM platform can come into its own. Reports are available to give to auditors when needed, and they show a record of compliance activity carried out and the decisions made.

The data held in a customer lifecycle management system can also be harnessed to make a difference to process efficiency in a firm; ironing out areas where there might be hold ups or delays in compliance workflows.

3 ideas for better CLM

1. Integrate your risk processes
Instead of creating disjointed onboarding and ongoing risk management processes, use your CLM solutions to integrate them and manage ongoing compliance activity. Your CLM software can also integrate with CRM tools, to provide real end-to-end coverage.

2. Get agile around regulation
Onboarding and risk management should be tailored for different compliance requirements related to products, customers and jurisdictions. Make sure you have the ability to map compliance workflows for these different requirements, all focussed on a central-risk engine. This gives you the ability to change workflows, processes and checks if compliance requirements change.

3. Bring data sources together
A lot of data is needed throughout a customer's lifecycle. Through APIs, a CLM platform can harness the power of a whole network of data sources. This means hundreds of different types of e-KYC, KYB, AML and Fraud checks can be performed quickly and robustly at any point in time, not just at onboarding. Compliance processes which would previously have involved multiple manual callouts and tracking can be managed and controlled in one place.

Your CLM requirements

If the idea of a CLM platform and the benefits it brings is of interest, PassFort provides a single solution from onboarding to risk monitoring to off-boarding.

This incorporates mapping policies for your products digitally around our central-risk engine, automating workflows to complete robust KYC/KYB and other compliance checks, flagging exceptions for EDD, and facilitating good quality customer experiences.

You can also integrate all your data providers and existing CRM tools with PassFort to create a holistic CLM solution.

Contact PassFort any time to talk about your business and how we might be able to support you.


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