Amelia Whitfield Achieves 40% Faster Onboarding with Enhanced KYC

Amelia Whitfield Achieves 40% Faster Onboarding with Enhanced KYC

Executive Summary

Whitfield Tax & Wealth, a growing RIA firm, struggled with a lengthy and inefficient client onboarding process hampered by manual Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. By implementing an automated KYC/AML screening solution integrated directly into their Salesforce Financial Services Cloud CRM, Amelia Whitfield and her team reduced onboarding time by 40%, significantly improved client satisfaction, and bolstered their compliance posture. This resulted in a 15% increase in new client acquisition within the first quarter post-implementation.

The Challenge

Whitfield Tax & Wealth manages over $150 million in assets for a diverse clientele ranging from high-net-worth individuals to small business owners. Prior to implementing an automated KYC system, their client onboarding process was cumbersome and time-consuming. Each new client required manual verification of identity documents, background checks, and sanctions screening.

This manual process presented several key challenges:

• Lengthy Onboarding Times: On average, it took 5-7 business days to fully onboard a new client. This delay frustrated prospective clients and negatively impacted the firm's ability to quickly deploy assets. The average time to revenue generation for a new client was thus extended by at least a week.

• Increased Operational Costs: The manual KYC process required significant staff time, costing approximately $150 per client in labor expenses. Considering an average of 20 new clients per month, the firm was spending $3,000 monthly, or $36,000 annually, solely on manual KYC efforts.

• Risk of Human Error: Manual data entry and verification processes were prone to human error, increasing the risk of overlooking red flags and potential compliance breaches. A single compliance oversight could result in fines ranging from $5,000 to $100,000 per violation, plus potential reputational damage.

• Difficulty Scaling: With plans to expand their client base by 20% in the next year, Amelia Whitfield recognized that the manual KYC process would become unsustainable. Continuing with the existing process would require hiring additional staff, further increasing operational costs.

• Poor Client Experience: The repetitive requests for documentation and the extended onboarding period led to a negative perception of the firm's efficiency and responsiveness. Many prospective clients expressed frustration with the process, leading to some abandoning the onboarding process altogether, representing a potential loss of several hundred thousand dollars in managed assets annually.

The Approach

Amelia Whitfield and her team recognized that automating their KYC and AML screening processes was essential for improving efficiency, reducing risk, and enhancing the client experience. Their approach was guided by the following key principles:

1. Comprehensive Solution: Select a solution that provides end-to-end KYC/AML screening capabilities, including digital identity verification, background checks, and sanctions screening.

2. Seamless Integration: Ensure that the solution integrates seamlessly with their existing Salesforce Financial Services Cloud CRM to minimize disruption and maximize efficiency. They knew native integration was crucial to avoid data silos and manual data transfer.

3. Data Security and Privacy: Prioritize data security and privacy to protect client information and comply with regulatory requirements like the Securities and Exchange Commission (SEC)'s Regulation S-P (Privacy of Consumer Financial Information).

4. Real-Time Risk Assessment: Implement real-time risk assessment capabilities to identify potential risks early in the onboarding process.

5. Continuous Monitoring: Establish a system for ongoing monitoring of client information to identify any changes in risk profile.

Whitfield's team evaluated several KYC/AML solutions before selecting a combination of Jumio Netverify for identity verification and Dow Jones Risk & Compliance for AML screening. They chose this combination due to its comprehensive feature set, robust API integration capabilities, and proven track record in the financial services industry. They chose vendors with SSAE 16 SOC 2 Type II compliance to ensure data security and reliability.

The decision framework included scoring vendors against criteria such as accuracy of verification, speed of screening, ease of integration, cost, and ongoing support. They conducted a pilot program with a small group of new clients to test the solution and fine-tune the integration.

Technical Implementation

The technical implementation involved integrating Jumio Netverify and Dow Jones Risk & Compliance with their Salesforce Financial Services Cloud CRM using APIs. The process was divided into several key steps:

1. API Integration: Jumio Netverify's API was used to integrate digital identity verification into the client onboarding workflow. When a new client initiates the onboarding process, they are prompted to upload a photo of their government-issued ID and a selfie. Jumio's AI-powered technology automatically verifies the authenticity of the ID and matches the selfie to the ID photo, reducing the risk of fraud and identity theft.

2. AML Screening: Dow Jones Risk & Compliance's API was used to automate AML screening. The system automatically screens new clients against global sanctions lists, Politically Exposed Persons (PEP) lists, and adverse media databases. Any potential matches are flagged for further investigation by the compliance team. The threshold for triggering a flag was set at 80% similarity to ensure potential matches were thoroughly reviewed.

3. CRM Integration: The results of the identity verification and AML screening are automatically recorded in the client's profile in Salesforce Financial Services Cloud. This provides a comprehensive view of the client's risk profile and simplifies compliance reporting. Data was mapped to custom Salesforce objects to streamline reporting and ensure data integrity.

4. Automated Workflows: Automated workflows were created in Salesforce to streamline the onboarding process. These workflows automatically trigger KYC and AML checks, send reminders to clients to submit required documentation, and notify the compliance team of any potential issues. Custom reports were created within Salesforce to track onboarding times, identify bottlenecks, and monitor compliance metrics.

5. Data Encryption: All client data is encrypted both in transit and at rest using industry-standard encryption algorithms (AES-256) to protect against unauthorized access.

The total implementation cost, including software licenses, API integration, and staff training, was approximately $25,000. However, Whitfield anticipated a significant return on investment through reduced operational costs and increased revenue.

Results & ROI

The implementation of the automated KYC/AML screening solution yielded significant improvements in efficiency, compliance, and client satisfaction.

• 40% Reduction in Onboarding Time: The average onboarding time decreased from 5-7 business days to just 3 days, a reduction of 40%. This faster onboarding time significantly improved client satisfaction and allowed the firm to deploy assets more quickly.

• 15% Increase in New Client Acquisition: The improved onboarding experience contributed to a 15% increase in new client acquisition in the first quarter post-implementation. This translated into an additional $22.5 million in assets under management.

• 98% Initial Document Accuracy Rate: Automated document verification resulted in a 98% initial document accuracy rate, significantly reducing the need for manual review and correction.

• $2,000 Monthly Savings in Labor Costs: The automation of KYC processes reduced labor costs by approximately $2,000 per month, or $24,000 annually. The ROI calculation included the $25,000 implementation cost amortized over 2 years, resulting in a positive ROI within the first year.

• Reduced Compliance Risk: Automated AML screening significantly reduced the risk of non-compliance. The system automatically flags potential matches, allowing the compliance team to investigate further and take appropriate action. This reduced the potential for fines and reputational damage.

• Improved Client Satisfaction: Clients reported a significantly improved onboarding experience, citing the speed, efficiency, and convenience of the automated process. Net Promoter Scores (NPS) for new clients increased by 20 points after the implementation.

Before the implementation, the client onboarding team spent approximately 6 hours per week per client on KYC related tasks. After the implementation, this was reduced to approximately 2 hours per week per client, freeing up significant time for other value-added activities.

Key Takeaways

For RIAs and wealth managers looking to streamline their onboarding processes and strengthen KYC compliance, here are some key takeaways:

1. Automate KYC/AML Screening: Automating KYC/AML screening processes can significantly reduce onboarding time, improve accuracy, and reduce compliance risk.
2. Integrate with Your CRM: Integrating your KYC/AML solution with your CRM provides a seamless workflow and a comprehensive view of client risk profiles.
3. Prioritize Data Security and Privacy: Ensure that your chosen solution adheres to the highest standards of data security and privacy.
4. Focus on Client Experience: A streamlined onboarding process improves client satisfaction and can lead to increased client acquisition.
5. Regularly Review and Update: Continuously review and update your KYC/AML processes to adapt to changing regulatory requirements and evolving threats.

About Golden Door Asset

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