Enhancing the client experience with automated onboarding

By Jacob Northey, AVP Certification & Testing Engineering
September 17, 2015

Jacob Northey, AVP Certification & Testing Engineering for Itiviti, examines ways in which sell-side’s can automate client onboarding to offer an enhanced customer experience and grow their business. With sell side’s today under immense pressure as regulators crack down on risk, the knock on effect for brokers is the need to increase capital reserves and cut back on highly leveraged proprietary trading. In parallel, ultra-competitive markets are spelling diminishing margins and revenues per trading client. In this climate attracting and retaining new clients has escalated to an even greater priority.

Sell-side headcounts have been slashed across the board, and client onboarding teams have not been spared. Automating the client onboarding process dramatically reduces the number of manual steps and employee effort involved. This translates to a reduction in demands on the sell-side’s pared-down onboarding team—freeing them up from routine, manual tasks, and enabling them to shift their focus to more goal-oriented work that provides firms with competitive differentiation.

Automating the client onboarding and certification testing processes helps sell-side firms cement key client relationships, and allows buy-side clients to get set up and trading faster.

Problems with manual certification

Delays in Adding Business:

Buy-sides are not satisfied with having to wait months or even weeks to begin trading. Clients have increasingly high expectations about the turnaround times for market access. They don’t want to answer the same questions repeatedly, nor have their assets tied up in administrative delays instead of earning income. But for many sell-sides and trading venues, certifying new clients is incredibly time-consuming because it is handled manually.

The traditional onboarding process not only creates frustrated clients—it puts a hold on adding new business and delays time to revenue. When certifying a new connection manually, any area of non-conformance between the broker and client systems is revealed slowly, one message at a time. Often this means that sell-sides have a major backlog of clients waiting to get set up. If backlogs become too lengthy, clients may take their business elsewhere — since there is always a competitor promising better service.

Strained Resources:

Manual certification can put a major strain on employee resources, particularly if working with clients in different time zones. In the typical process, FIX specialists for the client and the sell-side schedule an appointment to test together. In most cases, issues arise often during certification testing, each one forcing the certification specialists to discontinue the test, work with developers to address the issue, and then schedule a new testing appointment. Working around schedule conflicts during certification is a major headache, especially if the parties are not located in the same time zone. And the process is not confined to the initial onboarding alone. Each time a client requests access to new markets or asset classes, new certification tests need to be completed, and the process starts over.

Issues with client integration:

When integrating with buy-side clients’ trading systems, sell-side programmers often encounter technical idiosyncrasies that require customization. In many cases, the engineer will end up writing custom code for that connection. These layers of code add operational risk, and require the attention of increased ongoing maintenance and support resources.

In most large sell-side environments, clients will need to be onboarded onto more than one system—which means connecting to and testing dozens of touch-points. When custom code is introduced, it creates a complex process that can take weeks to accomplish.

As clients expand their use of the broker’s services, they inevitably add more systems, introducing more complexity. Sluggish service can vastly diminish a broker’s cross-selling opportunities and retention rates—something firms can no longer afford to take lightly. It can also adversely affect revenue, preventing clients from sending order flow until they’re connected and certified.

Automation helps clients get trading faster & monitor business KPIs

Systems that streamline and speed up the onboarding process—while offering the ability to change configurations and apply business logic without the need for custom code—help sell-side firms offer their clients a consistent trading experience.

When certification is automated, sell-sides can give a new client access to the certification system. From there, the client can obtain the broker’s online FIX spec, begin making any necessary code changes, and configure their FIX engine accordingly. They then connect to the broker’s certification testing system and begin testing at their convenience. Automation can also potentially give clients important access to the monitoring process, helping them better understand their business KPIs.

This approach gives clients control over their testing and also eliminates the need for onboarding specialists to constantly set up meetings with clients each time a testing roadblock is encountered. The sell-side’s onboarding specialist can see each step in the client’s testing process and offer support as needed. If a client does run into a problem as they work through the certification process, the sell-side support team will immediately receive a notification. This way issues can be identified and worked through in real-time.

Utilizing a system that allows clients to self-certify—and multiple clients to test simultaneously—can help brokers eliminate their onboarding backlog. Automation speeds along the mundane functions of the process, giving onboarding specialists more one-on-one time to devote to areas where clients need special assistance.

 Advantages for both sell-side and client

Automation offers both sides of the relationship significant advantages. Clients enjoy a superior customer experience, including a transparent and swift onboarding and certification process, and the ability to start trading sooner. Differentiated services and support also help increase their trust and loyalty.

Sell-side firms are able to significantly improve productivity and time to revenue. The onboarding team stops spending so much time on mundane and repetitive certification tasks, meaning they can spend more time bringing real value to the clients. They are able to focus on identifying new opportunities and developing innovation that moves the business forward. Over the long term, sell-sides will be empowered to build strong and lasting relationships with high-value clients — which not only helps improve retention rates, but boosts a firms’ success in cross-selling and up-selling key accounts.

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