40% Faster Onboarding: Streamlining Summit's KYC Process

40% Faster Onboarding: Streamlining Summit's KYC Process

Executive Summary

Summit Capital Partners, a rapidly growing wealth management firm, struggled with a cumbersome and time-consuming Know Your Customer (KYC) process that hampered client onboarding. By implementing Golden Door Asset's automated KYC solution, integrated directly into their Salesforce Financial Services Cloud CRM, Summit Capital reduced onboarding time by 40%, improved client satisfaction scores by 15%, and freed up valuable advisor time to focus on client relationships and portfolio management. This case study details how Summit Capital achieved these remarkable results.

The Challenge

Summit Capital Partners, managing over $750 million in assets for high-net-worth individuals and families, experienced significant growth in recent years. This growth, however, exposed critical inefficiencies in their client onboarding process, specifically within the crucial Know Your Customer (KYC) phase. Prior to implementing Golden Door Asset's solution, the KYC process was largely manual, relying on advisors to collect, verify, and document client information.

This manual process presented several key challenges:

• Lengthy Onboarding Times: The average time to onboard a new client was 7 days. This delay stemmed from the time-consuming process of gathering necessary documents like passports, utility bills, and bank statements, as well as manually verifying the information against various databases and sanction lists. For high-net-worth clients expecting seamless service, this delay created friction and negatively impacted their initial experience. Specifically, a delayed $5 million account transfer due to KYC bottlenecks resulted in a lost opportunity of approximately $2,500 in potential market gains (assuming a conservative 0.5% weekly return).
• Inefficient Advisor Time Allocation: Advisors were spending, on average, 8 hours per new client dedicated to KYC-related tasks. This time was diverted from more strategic activities, such as client relationship building, financial planning, and investment management. With each advisor onboarding approximately 5 new clients per month, this equated to a loss of 40 hours per advisor per month – time that could have been used to manage existing client portfolios and attract new business. The opportunity cost of this lost time was estimated at $4,000 per advisor per month, based on their hourly billing rate.
• Increased Risk of Compliance Violations: Relying on manual processes increased the risk of human error and potential compliance violations. The complexity of ever-changing regulations, including FinCEN guidelines and Patriot Act requirements, made it challenging to ensure consistent and accurate KYC compliance. A single compliance violation could result in significant fines and reputational damage. The firm estimated that the cost of a potential compliance audit failure related to KYC deficiencies could be upwards of $50,000.
• Fragmented Data Management: Client data was scattered across multiple systems, including the CRM, document management system, and various third-party data sources. This lack of centralized data made it difficult to gain a comprehensive view of each client and increased the risk of data inconsistencies and inaccuracies. This often led to advisors needing to spend an additional 1-2 hours per client, on top of the initial 8, resolving discrepancies.
• Poor Client Experience: The cumbersome onboarding process and the constant back-and-forth communication required to collect and verify information resulted in a frustrating experience for new clients. Clients often expressed dissatisfaction with the lack of transparency and the perceived inefficiency of the process. A recent client survey revealed that 30% of new clients rated the onboarding process as "average" or "below average," highlighting the need for improvement.

The Approach

Golden Door Asset worked closely with Summit Capital Partners to develop and implement a fully automated KYC solution tailored to their specific needs and integrated seamlessly with their existing infrastructure. The strategic approach focused on:

1. Needs Assessment and Process Mapping: We began by conducting a thorough assessment of Summit's existing KYC process, identifying key bottlenecks, pain points, and areas for improvement. This involved interviewing advisors, compliance officers, and IT staff to gain a comprehensive understanding of their current workflow. We then created a detailed process map that visually represented each step of the KYC process, from initial client contact to final approval.

2. Solution Design and Integration: Based on the needs assessment, we designed a customized KYC solution leveraging Golden Door Asset's KYC Connect API. This solution was designed to integrate directly with Summit's Salesforce Financial Services Cloud CRM, providing a centralized platform for managing client data and automating KYC workflows. We also integrated with various third-party data sources, including LexisNexis, World-Check, and Accuity, to automatically verify client information against sanction lists, politically exposed persons (PEP) databases, and other relevant sources.

3. Automated Risk Scoring and Due Diligence: We implemented an automated risk scoring model based on FinCEN guidelines and industry best practices. This model automatically assigns a risk score to each new client based on factors such as their country of origin, occupation, and source of wealth. High-risk clients are automatically flagged for enhanced due diligence, triggering additional verification steps and alerts for compliance officers.

4. Automated Document Verification: The solution incorporates Optical Character Recognition (OCR) technology to automatically extract relevant information from client documents, such as passports, utility bills, and bank statements. This information is then automatically verified against third-party data sources to ensure accuracy and completeness.

5. Workflow Automation and Notifications: We configured automated workflows to streamline the KYC process and minimize manual intervention. These workflows automatically assign tasks to advisors, compliance officers, and other relevant personnel, and send notifications to keep everyone informed of the progress of each case. This ensured that all tasks are completed in a timely manner and that potential issues are addressed promptly.

6. Training and Support: We provided comprehensive training to Summit's advisors and compliance officers on how to use the new KYC solution. We also provided ongoing technical support to ensure that the solution continued to function smoothly and meet Summit's evolving needs.

The core strategic thinking was centered around minimizing human intervention and maximizing data integration, allowing advisors to focus on building relationships and managing wealth instead of repetitive administrative tasks. This approach drastically reduced the margin for error and allowed for greater scalability.

Technical Implementation

The technical implementation of Golden Door Asset's KYC solution involved several key components:

• KYC Connect API: The core of the solution is the KYC Connect API, which provides a secure and scalable platform for managing client data and automating KYC workflows. The API supports a wide range of data formats and protocols, making it easy to integrate with existing systems.

• Salesforce Financial Services Cloud Integration: The solution was tightly integrated with Summit's Salesforce Financial Services Cloud CRM, allowing advisors to access and manage client data directly from within their familiar CRM environment. This integration eliminated the need to switch between multiple systems, saving time and improving efficiency. Custom Apex classes were created to seamlessly push and pull data between Salesforce and the KYC Connect API.

• Third-Party Data Integrations: We integrated with a variety of third-party data sources, including LexisNexis, World-Check, and Accuity, to automatically verify client information against sanction lists, PEP databases, and other relevant sources. These integrations utilized secure API connections with encrypted data transmission.

• Automated Risk Scoring Model: The automated risk scoring model was implemented using a combination of machine learning algorithms and rule-based logic. The model takes into account a wide range of factors, including client demographics, geographic location, and transaction history, to assign a risk score to each client. The risk score is continuously updated as new information becomes available. The risk scoring algorithm uses a weighted average methodology incorporating factors such as PEP status (30% weight), country risk (25% weight based on Transparency International's Corruption Perception Index), sanctions list match (35% weight), and source of funds documentation quality (10% weight).

• OCR Technology: We utilized ABBYY FineReader Engine to power the automated document verification process. This OCR technology automatically extracts relevant information from client documents, such as passports, utility bills, and bank statements, and then verifies this information against third-party data sources.

• Workflow Automation: We used Salesforce's Process Builder and Flow to automate the KYC workflow. This allowed us to define custom workflows for different types of clients and situations, ensuring that all tasks are completed in a timely and efficient manner.

• Data Encryption and Security: All data transmitted and stored within the solution is encrypted using industry-standard encryption algorithms. We also implemented strict access controls to ensure that only authorized personnel can access sensitive client information. Data is encrypted both in transit (using TLS 1.2 or higher) and at rest (using AES-256 encryption).

Results & ROI

The implementation of Golden Door Asset's KYC solution delivered significant results for Summit Capital Partners:

• 40% Reduction in Onboarding Time: The average time to onboard a new client decreased from 7 days to 4.2 days. This significant reduction in onboarding time allowed Summit to bring new clients onboard more quickly and start generating revenue sooner.
• 15% Improvement in Client Satisfaction Scores: Client satisfaction scores related to the onboarding process improved by 15%, as measured by post-onboarding surveys. This improvement was attributed to the faster onboarding times, increased transparency, and reduced friction in the process.
• 50% Reduction in Advisor Time Spent on KYC: Advisors spent 50% less time on KYC-related tasks, freeing up valuable time to focus on client relationship building, financial planning, and investment management. This translated to an average time saving of 4 hours per new client.
• Improved Compliance Posture: The automated KYC solution significantly improved Summit's compliance posture, reducing the risk of compliance violations and fines. The automated risk scoring and due diligence processes ensured that all clients are properly vetted and that any potential risks are identified and addressed promptly. The likelihood of a failed audit was reduced by an estimated 75%.
• Cost Savings: The reduction in advisor time and the improved compliance posture resulted in significant cost savings for Summit. We estimate that Summit saved approximately $2,000 per advisor per month due to the increased efficiency.
• $10,000 Opportunity Realized: The accelerated onboarding of a $2 million account allowed Summit to invest the funds almost a week earlier than previously possible, resulting in an estimated $10,000 in additional returns in the first quarter.

Overall, the ROI of the Golden Door Asset's KYC solution was substantial, exceeding Summit's initial expectations and contributing significantly to their bottom line.

Key Takeaways

For other RIAs and wealth managers looking to streamline their KYC processes, consider these key takeaways:

1. Prioritize Automation: Automating key aspects of the KYC process, such as data collection, verification, and risk scoring, can significantly reduce onboarding times and improve efficiency.
2. Integrate with Existing Systems: Integrating your KYC solution with your CRM and other existing systems can create a seamless and streamlined workflow, eliminating the need to switch between multiple systems.
3. Focus on Client Experience: A smooth and efficient KYC process can significantly improve the client experience, leading to increased satisfaction and loyalty.
4. Leverage Third-Party Data Sources: Integrating with reputable third-party data sources can enhance the accuracy and completeness of your KYC process, reducing the risk of compliance violations.
5. Implement Ongoing Monitoring: Continuously monitor your KYC process to identify areas for improvement and ensure that it remains effective and compliant with evolving regulations. Regular reviews of the risk scoring model and data integration points are critical.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate compliance tasks and make smarter investment decisions. Visit our tools to see how we can help your practice.