Client Offboarding

June 8, 2015

For many banks, client onboarding is a continual process involving dedicated departments who are subject to continual process refinement and standardisation.  Conversely, offboarding is seen as a time-limited, one-off exercise.  Brickendon Consultants have experienced the benefits of well-structured offboarding projects and of embedding offboarding into Business As Usual (BAU) processes.

What is offboarding?

Offboarding is the process of removing inactive, and therefore unprofitable, client records from the multiple front-to-back systems where they are held. The cost of maintaining a client record derives from the time taken to perform Know Your Client (KYC) and other Anti Money Laundering (AML) reviews, as well as technology costs.  Where offboarding is not embedded in BAU processes, banks find that up to 25% of these client records are inactive clients or duplicates.  Given these figures, and the cost of record maintenance, the business case for offboarding is compelling.

However, there are significant obstacles when defining the process to realise these costs and headcount efficiencies:

  • Risk to profit and reputation
  • Regional process variations
  • Data housekeeping issues
  • Proliferation of ‘tarnished’ golden-copies of static data

The Brickendon Solution for client offboarding 

Brickendon Consultants have developed a structured 5-stage offboarding process that greatly benefits clients. This Brickendon Solution is a proven process for reducing client reference data costs and improving ongoing data maintenance.

Business Case

  • Client offboarding that only engages official static data stores leaves banks exposed to fraud and regulatory fines.  A clear business case is required to get front-to-back organisational buy-in.
Define Business Rules
  • Defining a client as ‘inactive’ based on trade activity, open positions and potential profitability requires significant analysis.  Agreement of inactive logic with front office and sales stakeholders is crucial to avoiding reputational damage.
Address Technology Challenges
  • The volume of offboarding to be undertaken necessitates a combination of manual and scripted mechanisms, dependent on individual applications. These need to be understood before proceeding to implementation.
Implementation
  • Offboarding processes need to ensure that every layer of a client footprint is removed throughout the organisation – client, portfolio and account. A repeatable batch process needs to be defined and implemented.
Embed into BAU
  • Implementing an offboarding project provides a great opportunity to embed part-automated offboarding mechanisms into BAU processes to ensure the reduction in running costs continues past the end of the project.

A common mistake in Client Offboarding Projects is the failure to take into account how unique each organisation is when managing its client data. Previous failures frequently came from oversimplification: developing a simple rule based on a generic business model in the industry and applying this across without verifying the underlying assumptions. Also, poorly designed Client Offboarding Projects often failed to consider the differing impact and stewardship of client data across regional boundaries.

Client Benefits
  • Reduced BAU Costs
  • Headcount Efficiencies
  • Reduced Volume and complexity of Client Data
  • Reduced Fraud Opportunities
  • Improved Regulatory response

Brickendon can structure and implement this highly sensitive initiative for clients who wish to maximise the benefits of Client Offboarding. Through in-depth analysis of the business case, Brickendon Consulting can help define and establish business rules tailored to the client’s organisation. With a well-structured offboarding process, clients can continue to benefit from this Brickendon Solution, even after the project completion.

This solution is developed as part of the Brickendon Approach through collaboration between Reference Data Teams and our Knowledge Leadership Team.

Brickendon is continuously working to transform innovative ideas into practical solutions that can bring tangible benefits to our clients.

Contact us and find out more about how you can benefit from engaging Brickendon.

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