Financial institutions are embracing tools that can reduce the cost of customer lifecycle management and increase profitability and scalability.

A change is underway for financial institutions  and the adoption of workflow orchestration tools. The buy side is breaking with tradition and building or adopting tools to reduce the price tag of customer lifecycle management and by doing so they are more nimble and competitive in an ever-changing regulatory landscape. In this special Q&A, Marissa Tota, a product manager for the Counterparty Manager suite of solutions at S&P Global Market Intelligence, provides insights into this new dynamic. Tota has more than ten years of experience in the onboarding space with a focus on sell-side engagement. When she worked at several global banks, she managed end-to-end onboarding with large asset managers and helped them navigate KYC requirements, legal negotiations, and the changing regulatory environment.)

Q: How does improving the onboarding experience give firms a competitive advantage? Which onboarding technologies are making this possible?

A: Onboarding efficiency has become an X-factor in how clients evaluate and rank service providers.

Firms that have focused on streamlining and automating their onboarding process to ensure they will consistently meet target dates, end up with a competitive edge that often leads to capturing more wallet-share through initial transactions and future long-term business.

S&P’s CLM Pro platform makes it possible for brokers, custodians, prime brokers, investment advisors, and private markets to realize the efficiency and transparency required to optimize their onboarding process.For example, we have buy-side firms utilizing CLM Pro to streamline the onboarding of their separately managed accounts and fund launches, and custodians utilizing it to standardize their sub-custodian account setup process.

Technology that can digitize workflows, automate data processing, and enable collaboration between counterparties and systems are critical components in driving this positive evolution in the industry.

Q: What went into the development of the CLM Pro offering? Why was that evolution necessary?

A: When we started Counterparty Manager in 2007, which enabled buy-side clients to share onboarding documents and entity data in a centralized and secure platform to their brokers, this was just the beginning.

Building upon this foundation led to the evolution of CLM Pro, which addresses the broader challenges of the entire client lifecycle through centralizing integrations with key S&P assets, such as Counterparty Manager, regulatory data (ISDA Amend), tax validation, KYC [know your customer] capabilities, certificate compliance, legal negotiations (Request for Amendment, ISDA Create) and outreach technology.

Bringing all these components of the onboarding process into a centralized platform, along with workflows that can track progress through to account opening completion, has improved efficiency for our clients by at least 50 percent. Customers are also now leveraging the platform to support all types of client lifecycle processes, from onboarding, to refresh, legal entity maintenance and offboarding.

The outreach technology is a differentiator for CLM Pro because it allows users to connect to any counterparties using a client portal to collect requirements in a standardized, client friendly manner, while also supplementing it with data from S&P’s integrations.

Lastly, the flexibility and configurability of CLM Pro has enabled S&P to solve a number of different customer use cases such as custodians, corporations, prime brokers, sub-custodians, regional banks, fund admins and private markets.

Q: Could we talk about some of the new areas for CLM Pro such as custody and private markets? Why is CLM Pro moving into these and other areas?

A: CLM Pro is uniquely positioned compared to our competitors to address the wide array of needs and nuances for custody and private market companies due to its high degree of configurability.

This puts the power back in the hands of the user and creates a much more scalable solution that has reduced dependency on the vendor. This enables features such as workflows, policies, forms, team management, dashboards, and email templates to be fully customized to align to any use case, without the need for large-scale code changes ancdevelopment cycles,  or internal procedural changes.

For example, for private markets CLM Pro supports GPs [general partners] with legal entity formation, document management and account setup to support their pre-trade compliance processes.

From a custody and sub-custody perspective, CLM Pro helps deliver transparency, accuracy and consistency into the complex custody account setup processes for different markets and omnibus accounts. Addressing these additional market segments is a natural step for CLM Pro as we look to solve challenges for a hyper-connected industry with multiple types of participan

Q: Many buy-side firms have resisted building an internal workflow orchestration tool for customer lifecycle management. But these firms now see the need for it. Why is that? What changed? How will firms benefit from it?

A: There have historically been a few reasons for buy-side firms to delay the adoption of workflow orchestration tools.

These include a lack of prioritization or investment in back-office technology, not enough volume to justify building a platform internally, or even siloed customer lifecycle approaches for different business units creating architectural challenges difficult to solve in a single system.

However, there is now a momentum shift towards buy-side firms adopting tools to reduce the resource cost of customer lifecycle management and to ensure they remain nimble and competitive in an ever-changing regulatory landscape.

In addition, when business volumes make manual processes such as emails and spreadsheets no longer viable, workflow orchestration tools have become a necessary tool to maintain profitability and scalability. For example, one of our customers, with only a handful of counterparts noted that they were sending over 250 emails in the best case scenario for a single account, whereas by adopting a solution they now create 1 request and can manage everything in a single location, vastly reducing the manual effort they previously faced.

In particular, out of the box solutions have become more appealing as they offer capability and affordability, with a quicker time-to-market. In an environment with lots of competition, a technology-led approach also gives firms an advantage by attracting customers with a faster and more transparent process.

Q: S&P Global has been gathering new metrics on client-related matters such as faster client onboarding and more efficient account openings. What examples and statistics can you share about this, particularly if it refers to    different jurisdictions and fund types?

A: One of the most exciting metrics we have seen lately is how our investment banking clients have leaned into automation in the last two years through API [application programming interface] integration with CLM Pro to better manage onboarding volumes in a shorter amount of time.

We have seen onboarding times decrease by at least 50 percent on average post- API integration, with a 90 percent or higher completion rate for requests received through the platform.

We have also continued to see these efficiencies drive down onboarding time globally, where to date, there’s been a 43 percent decrease in onboarding time for our EMEA asset managers and 51 percent for our U.S. asset managers on the platform, with the average days to onboard being less than 28 days compared to a 50+ days prior to platform adoption.

Some firms have even reported account opening within 24 hours, which showcases the true power of the platform. This reduction in average onboarding time reflects clients STP’ing processes for cash and FX Spot accounts, but also a reflection of trade products which require legal agreement negotiations. We now see clients focusing on improving processes for their credit approval and legal negotiation teams, which is essential to continue to drive that average down. Embedded metrics within CLM Pro empowers clients with data to drive process change conversations and hold internal teams more accountable to SLAs, resulting in the continued reduction of onboarding time in the industry.  

Q: Why is it important for a firm to have an enterprise-wide client lifecycle management platform?

A: An enterprise-wide CLM Platform gives firms a centralized location to manage all lifecycle events for customers across business lines. This eliminates duplicative efforts and processes, resulting in a more streamlined experience for the customer, increased cross-organizational visibility to deploy capital more efficiently, and overall cost reduction across the firm.

CLM Pro’s configurability makes it ideal for a firm’s sole end-to-end lifecycle solution that still supports different business lines and regional nuances, or alternatively as the glue that binds a firm’s existing, bifurcated internal platforms into a centralized place.
 

Visit spglobal.com/CLMPro to find out more and to request a free demo.  

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• Re-envisioning Client Lifecycle Management Whitepaper 
• Corporate Transaction Act Webinar on-demand   
• CLM Pro Infographic