By Alex Ford, Chief Revenue Officer, Encompass Corporation
Corporate client onboarding within financial services is rapidly becoming an increasing operational challenge. Previous traditional methods, typically reliant on manual processes and fragmented data systems, are struggling to meet the dual pressures of ensuring regulatory compliance while delivering a smooth client experience.
Corporate Digital Identity (CDI) presents a forward-thinking solution, revolutionising onboarding processes by offering an efficient, automated and scalable framework for financial institutions.
Evaluating the limitations of traditional onboarding
Traditional Know Your Customer (KYC) procedures have long been plagued by inefficiencies. These methods often require repeated manual verification of client data across disparate systems, leading to delays, increased costs, and frustration for both clients and institutions. In addition to the operational burden, such processes expose organisations to heightened risk of non-compliance with global regulatory requirements. The fragmented nature of traditional onboarding not only slows down client acquisition but also limits an institution’s ability to quickly adapt to changing market conditions and regulatory landscapes.
Reaping the benefits of CDI
CDI is transforming onboarding by centralising and automating the identity verification process. At its core, CDI leverages digital profiles that are dynamic, verifiable, and continuously updated, providing a comprehensive and accurate view of a client’s identity. This approach offers multiple advantages that go beyond immediate operational improvements, positioning CDI as a strategic enabler for long-term business success.
One of the most significant benefits of CDI is its impact on efficiency and cost reduction. By automating data collection and verification, CDI dramatically shortens onboarding timelines. According to industry insights, institutions implementing CDI have seen onboarding processing times reduced by as much as 32%. CDI also offers additional commercial benefits including reduced staff attrition; lower client abandonment rates and faster time to value; and the opportunity to consolidate technology. These multiple areas of efficiency gain and commercial uplift mean that up to 57% of the cost of implementing a CDI solution can be offset in the first year alone. Longer term, incremental gains year-on-year enable the desired outcomes and ROI realisation…
Beyond operational efficiency, CDI enhances the client experience. In today’s competitive financial landscape, clients expect a smooth and seamless onboarding process and will seek alternatives when this isn’t the case. Due to inefficient onboarding processes, 87% of corporate treasurers have abandoned banking applications for their business, leading to lost revenue and unhappy customers. Clients – particularly in high-stakes environments like corporate and investment banking – expect swift and hassle-free interactions. CDI meets these expectations by reducing the time and complexity involved in onboarding, fostering trust and improving client satisfaction from the outset.
Another critical feature of CDI is its focus on sustainability and scalability. Traditional KYC processes often require periodic revalidation, leading to inefficiencies and potential gaps in compliance. In contrast, CDI enables perpetual KYC, ensuring that client data remains accurate and up to date in real time. This capability not only supports ongoing regulatory compliance but also allows institutions to scale their operations more effectively, adapting to new business needs and regulatory changes without overhauling existing systems.
A long-term strategic impact
While the immediate benefits for CDI are clear, its long-term strategic value is even more compelling. The financial services industry is undergoing a profound transformation, driven by technological advancements, evolving regulatory frameworks, and changing customer expectations. In this context, the ability to leverage data as a strategic asset is becoming a critical determinant of success.
CDI provides financial institutions with a robust foundation for data-driven decision-making. By consolidating and automating client identity data, CDI enhances an organisation’s ability to analyse and act on client information in real time. This capability can drive more targeted and effective client engagement strategies, unlocking new revenue opportunities and strengthening client relationships.
Moreover, CDI supports compliance with increasingly complex regulatory requirements. Financial institutions are under constant pressure to demonstrate due diligence in areas such as anti-money laundering (AML). CDI’s dynamic and verifiable digital profiles deliver original source documents, corporate hierarchy, data provenance and a comprehensive audit trail, providing organisations with a consistent approach to meet these requirements with greater confidence and efficiency.
Finally, the scalability of CDI positions organisations to remain competitive in a rapidly changing market. As regulatory demands evolve and client expectations continue to rise, institutions that have adopted CDI will be better equipped to respond to these changes, ensuring their long-term viability and success.
How CDI can make a difference
The integration of CDI marks a significant shift in how client onboarding is approached. CDI tackles the inefficiencies of traditional KYC procedures while delivering a scalable, automated solution that enhances operational efficiency, boosts client satisfaction, and delivers long-term strategic benefits. In an industry where compliance and customer experience are critical, CDI is not merely a tool for operations; it is a vital strategic asset that ensures financial institutions remain adaptable and competitive.
For institutions poised to evolve their client onboarding processes, CDI offers the necessary capabilities to excel in a complex and fast-paced market. By adopting CDI, organisations can establish a strong foundation for sustainable growth, ensuring ongoing agility, compliance, and customer-focused service in the years to come.
