The Importance of a Collaborative and End-to-end System for Client Lifecycle Management

With an increased focus on client profitability, capital and new regulations, banks are breaking down internal silos to get a more holistic view of their client relationships. In this article, Amanda discusses the regulatory and economic drivers for Client Lifecycle Management (CLM) solutions and the importance of a collaborative approach in implementing the CLM strategy.

This article was first published in the Orient magazine #64, 15th December 2017.
By Amanda Hale, Consultant Analyst, base60 Consulting
Historically, CLM has suffered from a lack of investment with fragmented legacy systems often depending upon manual processes. There are inconsistencies across business lines, locations and entities. This often means that the clients’ information isn’t in one place, therefore a lack of overall visibility of the client. There are many parts to the client journey: prospecting, onboarding, collecting intelligence on the client so that they can be offered new products, pinpointing the most profitable clients worthy of personalised attention, and even offboarding those that are not profitable at all. Inadequate CLM is often made worse by fragmented workflows and tools, multiple touch points for clients and inconsistent data views across disparate systems.
Compliance issues are key
Better visibility of clients from effective CLM gives firms more revenue opportunities and enables regular checks on their requirements, such as timely preparation of tax and credit forms, but it is also vital for operational risk management and compliance. Transgressing compliance regulations can result in huge fines: earlier this year Deutsche Bank AG was fined £163 million by the Financial Conduct Authority for failing to maintain an adequate anti-money laundering control framework during the years 2012 to 2015. It had failed to properly oversee the formation of new customer relationships and the booking of global business in the UK, exposing itself to the risks of financial crime.
CLM needs to meet competing demands
Improving CLM has become a priority for many financial institutions and it is now enjoying major investment and multi-year work programmes. One of the main challenges is to devise an effective operating model that will satisfy the often-competing demands of regulatory compliance and operational risk management in addition to client centricity and profitability.
Regulatory change impacts the client lifecycle and data management
Compliance thresholds are frequently increased with recent examples being Dodds-Frank, FATCA, CRS, EMIR, MiFID II and BCBS 239. To avoid significant fines, financial institutions are ramping up internal checks and data controls by reengineering and implementing workflows. The onboarding process is far more extensive and now entails collecting supporting documentation from corporate clients on the nature of their business, ownership details, jurisdiction of operations, source of funding and the purpose of their accounts.
Better data analytics give deeper understanding of client needs
Clients expect value and convenience and these demands are influencing the loyalty and long-term profitability of a client relationship. Client onboarding has become a competitive differentiator – firms need to adopt a client centric approach and streamline their onboarding process to optimize the client experience. Failure to do so risks losing business and opportunities to competitors who have made the necessary investment to rectify CLM deficiencies.
Fintech providers are the solution for many financial institutions
Legacy infrastructures need to continually evolve to keep pace with current technologies. New fintech providers can help to drive further efficiencies by streamlining and coordinating end-to-end CLM processes on a single platform. These services are being continually developed to configure with existing workflows and regulatory rules to ensure Know Your Customer (KYC) compliance. Automation increases efficiency by eliminating high volume, simple onboarding and KYC tasks.
Cleaner client data will drive profitability
Many financial institutions lack a standard governance framework and operating model and this can result in inconsistent client data hierarchies being used by different functions across the firm. A single accurate view of the client is critical to understand client behaviour and actions, their cost and profitability, their impact of the new capital requirements under the BCBC IOSCO uncleared margin rules and the continued downward pressure on costs. Having more consistent and accurate data across the entire client lifecycle and throughout the client relationship enables smarter decisions around client servicing, profitability and offboarding.
The competing needs of the enterprise
When evaluating and refining CLM strategies, firms need to address the expectations and requirements of all parties; the client, the business, compliance as well as operations and technology.
The client expects account opening and maintenance to be transparent, timely and hassle free. They also want streamlined standardised interactions with minimal touchpoints and a single point of contact.
Businesses need a single view of the client to identify cross and upselling opportunities and to understand client profitability so that greater emphasis and service can be devoted to the more profitable clients.
Compliance regulations require rigorous checks and controls as well as operational risk management. The compliance teams need predictive tools to ensure compliance timeliness and flexibility to adapt to changing regulatory requirements. Upcoming regulations require better KYC and onboarding systems.
Operations and technology need consistent global processes and toolsets to streamline workflows and reduce manual input, and to provide market intelligence to monitor progress and identify risk.
CLM - the collaborative approach
CLM is a top priority for business, compliance, operations and technology management. We believe that the key to a successful and profitable CLM strategy is to adopt a holistic approach that involves all the stakeholders’ needs and competing expectations. Implementing the CLM strategy needs to be a collaborative and inclusive exercise that puts client centricity and compliance at the core of every initiative.


About the author:

Amanda is a Financial Markets Consultant at base60 Consulting with experience working as a project manager and business analyst on business strategy engagements for investment banks and market infrastructure providers. Most recently, Amanda worked with an investment bank to perform a global review of their Client Lifecycle Management (CLM) operating model and design a globally consistent CLM operating model vision and associated delivery framework

About the company:

JDX is an independent consulting company, created in 2012, with more than 500 employees globally, inspired by entrepreneurship and underpinned by our unique culture. JDX provides its clients with flexible, bespoke resourcing solutions in the areas of operational and regulatory remediation. The JDX Strategy is to do the right thing by clients with energy, enthusiasm, integrity and knowledge. 
In 2015 the JDX Group expanded its offering by launching JDX FinTech, JDX for Insurance, JDX Connect and base60. With this expansion, JDX is now able to provide the full suite of consulting services and is a compelling alternative to traditional consulting and resourcing providers. Visit for more information.