Onboarding in Corporate Banking

Banks don’t always take advantage of the latest technology to improve the onboarding process for corporate clients. Instead corporate banks are inclined to use onboarding processes that require the client to go to great lengths before their account is opened. These traditional corporate banking onboarding processes are expensive and complicated for both the bank and potential new client.

For corporate banks that use innovative technology to improve their systems they can now complete complex onboarding procedures using digital systems that are low-cost, accurate and fast. Not only are the latest digital onboarding processes efficient but they can also provide financial institutions with insights into customer preferences.
Financial institutions need their onboarding process to be efficient and fast in order to save money and time. As soon as the new client is approved the corporate bank can start generating fees and income. Corporate clients also need the onboarding process to be efficient and fast so that they can start using their business account as soon as possible.

Knowing Your Customer Starts with the Onboarding Process
Due diligence and knowing your customer is becoming progressively more important; regulators around the world realize that only with adequate knowledge of your potential client and his business can you make an informed and correct decision about who to deal with. If due diligence and KYC is lacking financial institutes can lose their reputation and be liable to financial and legal risks which can negatively impact the bank’s future.
Corporate banks must find a way to balance the time and effort it takes to do due diligence with the need of the client to conveniently and quickly complete the onboarding process. The client will be looking for a corporate bank that offers quality services, personal attention and an efficient onboarding process. The ideal onboarding process takes into account the client’s needs while still using an onboarding process that mitigates risk and thoroughly covers KYC, Beneficial Ownership Verification, Due Diligence etc.

Online Onboarding – the Pros and Cons
When a new corporate client commences the traditional onboarding process they spend days filling out forms. Instead of that wasted time it is possible to do all the initial form-filling online. In this way the new client can communicate online, find out exactly what is needed and wanted and even provide the initial forms and documents via the Internet. This may seem to take away from the personal touch that face-to-face dealings have but it definitely makes the process smoother, faster and easier. With a dedicated staff online onboarding doesn’t have to be impersonal and can be accompanied by online support where clients are helped through the process every step of the way.

The Pros of Online Onboarding for business bank account

• Online onboarding is faster so accounts can be opened faster
• Fewer long meetings and wasted work hours
• Less wasted paper so process is more eco-friendly
• Using advanced technology in the onboarding process sends a message to clients that the bank is forward thinking and up-to-date with innovative technology
• Fewer wasted work hours; staff may even be reduced

Anti-Money Laundering and the Corporate Banking Onboarding Process
Financial institutes manage, move, control and hold funds and property that belongs to their clients. This makes the financial institutions vulnerable to criminal activity and money launderers who want to take advantage of the bank’s unique position. For this reason directives, regulations and guidelines called Anti-Money Laundering (AML) are in place to prevent any illegal activity carried out through banks.
Anti-Money Laundering policies are particularly important during the onboarding process to insure that no new clients with a hidden criminal agenda are taken on. Banks are required to include AML processes in the onboarding process to be certain that the new clients are not breaking any of the legal requirements. For this reason AML guidelines are used during the account opening process to ensure that the new client is legitimate.

AML Implementation in Online Onboarding
Implementing AML during the traditional onboarding process is a comprehensive procedure but when online onboarding is used the AML implementation is even more essential and more complex. The financial institution needs to be able to calculate the potential client’s AML risk without the typical personal encounters and traditional methods. This is done with a digital onboarding systems that uses a configurable rule engine to calculate the AML risk of potential new clients. The AML risk is deemed low, medium or high. The corporate client’s risk level depends on many factors including the country of incorporation; PEP matches and negative media matches; the amount of total company assets managed by a bank; company ownership structure; country of company registration; jurisdiction where business operates; the sector the company belongs to; financial history of the company and owners etc.