1. TRANSFORMING - IB
CLIENT ONBOARDING
The paper puts a spotlight on the Investment Bankingonboardingprocess. It provides a
fairlydetailedinsight into key issues, causes and effects & focuses on the various
strategies at the disposal ofstakeholders to address the issues anddiscusses high level
solutions that can be deployed with a brief on the benefits
A fresh perspective
on issues and
Strategies to
transform IB
client on-boarding

2. Table of Contents
Executive Summary ............................................................................................................................2
Scope of the Paper..............................................................................Error! Bookmark not defined.
Defining Onboarding in Investment Banking (IB) Context ..................................................................2
Operational Complexity: .....................................................................................................................3
Issues that Plague IB Client Onboarding:..............................................................................................3
1. Drop-out rates / Request terminations .....................................................................................3
A point in case:................................................................................Error! Bookmark not defined.
2. Long Time to Onboard .............................................................................................................4
A point in Case................................................................................Error! Bookmark not defined.
3. Numerous Hand-offs with clients/ requestors: lack of response from them.................................5
4. Lack an Overarching Team or IT system:....................................................................................6
A Point in case.................................................................................Error! Bookmark not defined.
Effects:...............................................................................................................................................6
Key Considerations Prior to Change.....................................................................................................6
Strategies and Solution Framework: ....................................................................................................7
High Level Solutions Based on Pure Process Improvement Strategy...........Error! Bookmark not defined.
Creation of an overarching/ central Team as a single Entry point.......................................................7
No Chasers; Instead the in-flight requests will be taken up for discussion.......................................7
Upfront identification and reduction of potential drop outs ..............................................................7
Tactical workflow system & overarching Unique Reference foreach request......................................8
Consolidation of Touch pointsinto central team equipped with Rules Engine.....................................8
Clear road map for each scenario and standardized Routing..............................................................8
Introduction of Parallel Processing...................................................................................................8
Impact...............................................................................................................................................8
Credits...............................................................................................................................................9
Bibliography...................................................................................................................................9

3. Executive Summary
The onboarding process provides a realistic introductionto a bank’s or a financial institution’s operationalcapabilities . These
capabilities become a gauge of what to expect froma financial partner over the life cycle of the relationship. Like any other
process, on-boarding has its own set of problems.
The issues around onboarding process can be best summarized as:
"Client onboarding is a largely manual, error-prone, time-consuming, expensive, incomplete, and ineffective process. A large,
Tier 1 bank can spend more than $100 million a year on client onboarding, when you take into account the information
technology and operational considerations. Yet the process largely remains manual, error prone, time consuming, and risky in
terms of compliance with global regulations and the client experience" – Bill Cline, KPMG1
This process rarelygets the attentionneededand is evident from the staggering 80% - 90% client drop-out rates during the
lifecycle, longer leadtime & numerous touch-points withclients. This has overarching effects with dissatisfied customer
impacting reputational & financial losses along with higher operational cos t.
Scope of the Paper
While there is enoughliterature available onon-boarding process of retail banking, wealthmanagement andclient on-boarding
in generalwithina bank, there is little focus, andliterature around the Investment Banking specific on-boarding process. This
paper addresses the gap& unravelsthe onboardingprocessfor Investment Banking( excludes- Advisoryor Prop House trading
side of business), provides a fairlydetailedinsight into keyissues, its causesandeffects & provides strategic & tactical solutions
that organizations canadopt to addressthose issues. Leveraging experience of transforming the onboarding process at a large
multinationalbank herebyreferredto as ‘The Bank’ withoperations across the world.
The keybroadtopics that will be covered inthis paper include
 Key Issues plaguing the IB onboarding process & the magnitude of the problem.
 The various strategies that can be leveraged to address the issues
 Highlight & focus on how a seeminglycash burning overheadprocess canbe transformed into a competitive advantage
in market.
Onboarding process - Investment Banking (IB)
This sectionprovides anoverviewof high level onboardingsteps withinonboarding inInvestment banking (excludes - Advisory
and Prop house trading side ofbusiness).While some of the terminologyis specific from The Bank, the terminology is fairly
standard.
The broad stages and steps can be described as below
 Receipt of Request - Activities pertaining to receipt, capturing and assessment of request
 Client Review and Set-Up - Vetting activities and opening of Accounts for the client
 Configuration – Setting up the client in various downstream systems to enable the client to trade
1 Cline, Bill, 2014, TransformingClientOnboarding,
https://www.google.com.sg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0ahUKEwi70-
yXz8PPAhXKrY8KHf3SBGAQFghCMAM&url=https%3A%2F%2Fwww.kpmg.com%2FUS%2Fen%2FIssuesAndInsights%2FArticlesPublications%2FD
ocuments%2Fkpmg-client-onboarding.pdf&usg=AFQjCNEtLxktUJZD0p38ugX14XBJzpHbYg&bvm=bv.134495766,d.c2I, Pg3
Receipt of
Request
Request
assessment
KYC Review Credit Review
Legal
Negotiation
A/C creation
includingTax
Onboarding
Configuration in
Trading, booking
systems
Receipt of Request Client Review and Set-up Configuration

4. Operational Complexity:
Some factors that compound to the operational complexity around the IB on-boarding process are:
 On-boarding scenarios with multiple input variables
o ExistingRelationship and the scenario – No relationship i.e. New client, Existing client requiring New A/C, New
o Entitlement
o Entity type
o Domiciles/ Country of incorporation of client,
Fund and
o Sales location
o Products to be traded
o Asset class
o KYC Risk categorization
o Regulation Status/ classifications
o Booking Entity
o Settlement type
o Disclosure status
o Type of Legal agreement
o Type of configuration requested
o US person or not
o Credit By-pass applicability
o Types of configuration systems the client is
requesting
o Legal hierarchy
o Other non-master arrangements required such
as the clearing arrangement
o For cleared derivatives, master confirmation agreement
 Multiple teams spreadacrossvarious time zonesinthe F2B process which transpire into numerous sub-processes. This
drives the number oftouchpoints with multiple handoffs, dependencies, referralsand also ownershipandaccountability
challenges
 The maze of AML/ KYCrequirements regulatory compliance standards, tax compliance standards as applicable ,
An example ofthe complexityinvolved - A US client's Europeansubsidiaryrequires to on-boarda newfundandwill be trading
in OTCs APAC, the onboarding couldpotentiallyinvolve a common bank-wide vettingstandards andlocalvetting standards in
APAC. The regulatorystandards applicable could be DoddFrank, EMIR, and Volcker categorization. Trade reporting standards to
complyto couldbe MiFiD, MAS/ASIC. From the tax perspective FATCA, AEI couldbe applicable. Determiningthe applicability,
classificationandobtainingthe relevant documentation in support of it adds additional dependencies to the process.
Note: The Front-to-Back / ‘F2B' process here refers to the entire process: starting from the point when a requestor places a
request for onboarding through the point when client is ready to trade.
Issues plaguing IB Client Onboarding:
Although there are multiple problems we deal with some of the major ones here:
1- Drop-out rates or request terminations
A client dropout in the context of on-boarding is a client request being terminated at anystage ofthe on-boarding process & is
one of the biggest challenges. The Exhibit 1 gives a view of this waste that is present in the on-boarding process across the
Industry. The exhibit is anillustration& a result of a sample study of clients that were on-boarded in "The Bank" in 2014,
depictingthe % of client requests not progressedforward at keystages, as youcanseefrom the illustration, a staggering 92 %
of the onboarding requests receivednever enduptrading. Thisresults in wasted effort of the various teams involved in the
onboarding. The effort wasted depends on which stage the client dropped.
Analyses of some of the causes that impact this high drop rate are as follows
1. Lack of engagement from sales team
2. Lengthy onboarding process
3. Multiple touch points with clients & a lack of response from them
Industry Problem?
The problemof client dropout of request terminations is not specific a particular bank or Investment Bankingalone, but it is a
problemwithinthe entire ecosystem. In a surveyconducted with211 wealthmanagers in 2014 (Bolstadet al, 2014) 1, it was
found that a good two-thirds of the wealthmanagers had varying degreesof concerns a good two-thirds of the wealth
managers hadvaryingdegrees ofconcerns withregards to client droppingout during the onboarding process.

5. Exhibit 1
*Source: The Bank, based on sample study
1. Long Time to Onboard
The time takento onboard is long drawn and canrange froma few hours to a few days & evenmonths. This time to on-board
depends primarily on client scenario reflecting the relationship of the counterparty with the Bank.
Some of the know client scenarios are as outlined below
 New Client onboarding: No existing relationship between The Bankandthe counterparty. This has the highest lead time
as it involves going through all the steps of on-boarding.
 Existing Client - New fund onboarding: The counterpartyis alreadya client for The Bankbut would like to onboard a new
fund which would trade with The Bank.
 Existing Client - New Entitlement onboarding: Here the purpose of onboarding is to addanadditional client / additional
contracting entity. This is the fastest and consumes the least time.
Exhibit 2 presents the result ofa sample studyof 139 cases inThe Bank for OTC product where the Turn-Around-Time (TAT)
was found to be 148+ days. The detailed process-wise break up can be seen below:
8
Clients trading IB
products
40
Requests processed
by Legal and A/Cs
created
50
Requests
processed by
Credit
60
Requests
processed by KYC,
40% drop out rate
due to no
response from
FO/client
100
Requests to
onboard a client
are sentto KYC to
perform AML
tasks
Clients’ requests not
progressed due to lack
of client engagement,
no follow-up from FO
Clients not progressed
due to lack of client
engagement or no
agreement with client
or depriooritr
Clients not progressed
due to lack of client
engagement or de-
prioritization
Four fifths of the
Clients on-boarded do
not trade with us
40 10 10 32
Analysisof ClientDropouts(requestsnotprogressed) forIBclientin2014*
)
Progressed
Progressed Progressed
Progressed
ClientsDrop-Out
ClientsDrop-Out
ClientsDrop-Out
ClientsDrop-Out
CAUSE

6. Exhibit 2
Note: The results are not a based not tracking a single request end to end as it is not a very common scenario for brand new Agent getting on- boarded; but this is
based on samples collected from different stages and aggregating them to provide a full picture of entire on-boarding cycle.
Legal and KYC have the longest lead time as seen in the exhibit
The root causes for typically a long TAT around KYC and more so with Legal is the following:
 KYC process - Involves various global andcountrystandard specific checks which are normallyput througha pipe which is
generally clogged with huge volumes of periodic KYC reviews;
 Legal process - Negotiationof master agreement ISDA in the case of OTCis time consuming; Some of the clauses which are
risky needs to go through approval process of a wider group including group treasury, Credit Legal counsel etc.
For both the processes, there are multiple touchpoints with clients or sakeswithinterdependencies leaving scope of waiting
time andlonger TAT. There are other challenges of data gathering with has dependency on front office/ clients response
2. Hand-offs with clients & lack of response from them
The following Exhibit 3 is an illustration of all the possible touchpoints with Client for a new client onboarding process . In
certaincases the Sales/FO or middle office might mediate the contacts withclient hence, the client broadly represents the
requestor group.
Causes impacting this multiple touch points are
 Lack of expertise within one team with respect to documentation requirements
 Lack of a standard process / guidelines on list of documents required by the different teams
 Lack of response from requestors due to conflicting priorities, lackof appropriate client contacts, turnover of Sales etc.
35 10
81
1.4 6 7 4.2 1 2 1
0
40
80
120
160
KYC
Credit
Legal
Captureof
Request
Datagathering
CreditApproval
Routing
TaxApproval
AccountSetup
Account
Configuration
New clientOnboarding processes Existing Client Process: Account Set-up andclient configuratipon processes
Break-up of TAT (Turn Around Time) in number of Days (OTC)

7. 3. Lack an Overarching Team or IT system:
The onboarding process inan IB world involves numerous stakeholders performingspecialized activities, there is no single
overarching workflow that canhost/ trackor facilitate the F2Bprocessand nosingle team which cananchor the request end to
end.
The Exhibit 4 below is an illustration below is a spaghetti diagram of The Bank.
Some Key observation that can be made from the above analysis:
 Multiple touchpoints leadingto huge referral percentage thereby increasing the Waiting time and turnaround time.
 Lack of connectivitybetweensystems resultingin requests anddata not flowing fromone system to another leading to
manual routing and data entry.
 Systems working in silos reducing visibility and transparency
 Lack of a unique request ID
In summary, the on-boardinghas issues that manybanks/ financial institutions grapple with. However, it is important to note
that an understandingof domainandthe context is veryimportant aspect of providing a solution to address the issue. The
subsequent sections will details onthe keyconsiderations andsolutionthat canaddress some of the systemic problems of the
on-boarding process of Investment banking.
Getting ready for the transformationJourney
Prior to setting out on a transformation journey the following considerations need to be take care
 Objective of Change: The objective ofchange has to be established before embarking on the change journey. The
objective couldbe to bringabout incremental change or alsoa big IT change to bring ina platform to integrate the disjoint
systems.
 Timeframe:A quick Kaizenexercise to identifylowhanging fruits will have a verydifferent timeline to anIT transformation
project involving Process re-engineering.
 Budget: Most long lastingchanges needtime & hence a higher budget to implement, institutionalize & make the change
operational.
Source: The Bank
A Spaghetti diagram of the onboarding process along with system flows
)

8.  Impact of ongoing change / regulatory projects: There are usuallymultiple ongoing projects ( regulatory and others )
within the same scope and the impact of those need to be evaluated.
Exhibit 5
Solution- Strategies and SolutionFramework:
The exhibit maps the Degree of focus ofthe magnitude ofchange requiredwiththe improvement focus methods usedon the Y
axis
 Creation of a central team as a Single Point of Entry for all requests
Lack of ownership & accountabilityfor the request at different stages is a major issue leaving a vacuumbetween departments
& impacting the wait time betweenthe 2 teams and steps in the process. An overarchingteamcalled "Case Management" was
createdbycentralizing the routing for account creation as an overallowner of seeingthe request through the entire life stage.
All caseswouldbe routed through this team & it will become the face for requestor group , responsible for obtaining
documents that are requested from downstreamteams (Example: CRC, Legal, ticket creationteam, KYCteam not to process a
request unless routed through this team ). This addressed the issue and had the following advantages
o Established a clear owner and accountability for the request
o Became a "Single point of Entry" for all requests
o Enabled easier tracking and follow up on the request
o Any breaks in flow were quickly picked up and the request would be pushed through subsequent stages
 Creation of a Governance Framework to highlight inflight/ pending cases.
Complete stop on Chasers or follow up.
One keydesignprinciple for the teamwas to avoidany chaser by Case management team & only update the progress of
request. The MIS captured inthe background would give a viewof where the bottlenecks are andthiswouldbe escalatedinthe
governance forum.
 Prioritization Algorithm to address potential drop outs upfront
To address the high % of dropout rate the following measures we re adopted
 Algorithm based Prioritization: A weight was assigned to each request dependingon trade date, bulk requests or not,
Assets under Management of Fund, expected Wallet share operational complexityetc. An algorithm was thenbuilt that
wouldassign a priority in such a way that a constant percentage of High priority, medium priority and low priority is
maintained for the pipeline.The lowest priorityhad to be takenupfor review withsenior sales executives and about
25% of the requests were dropped as a result.
 Upfront approvals in case of frontloading/ bulk requests: There were in-built upfront tagging of requests and any
request without clear trading intent would go throughanapproval process withSenior Sales person, discussedwith the
client & put on hold if necessary.

9.  Consistent and regular Client Connect: A consistent communicationstrategy from the Case Management team- Exactly
4 communications with client by the Operations team.
1. Acknowledge the request and confirm/ provide minimum information for taking the request forward
2. Request for any additional/ missing documentation (if any) from the client
3. Provides a view of the process which the request will go through and approximate view of the timelines
4. Final, communicationprovides a completionof request message , comparing it against the intended trade date
 Tactical workflow system & overarching Unique Reference for each request
Basedon the availabilityof SharePoint for creating verylight webbasedportals (with end user access and no customizable
permission) a tactical portal was created with the following key features:
• Capture the requests – corresponding documents, information/ attributes
• Generate a Unique reference – that will be reference for all teams involved in the onboarding process
• Store Documents required for F2B teams
Given the IT system enhancements were out ofscope, the unique reference number was passed to respective teams via mails.
All the executionteams were provided access to the portal andcouldleverage the informationcapturedpertaining to request.
For everyrequest, a minimum set of attributes were captured which was acknowledged by client. Unless the m inimum
attributes were captured, the request wouldn't be taken forward.
 Consolidation of Touch points into central team equipped with Rule Engine
Although the requirements interms ofinformation/ documentation heavilydepended onfew drivers andare different for each
team, their requirements were capturedinthe form of Rule engine andthe Case Managers were trained to use it and obtain
the documentation/ informationrequired. A clear strategywas provided in terms of the sources of these documents a nd
reaching out to client was the last resort. The Case manager wouldface-off requestor groupandwouldobtain any additional
documentationrequired. For anydocuments/info not capturedas part of Rule engine would gothrougha maintenance process
where the requirement would be fully understood and captured as an additional rule.
 Clear road map for each scenario and standardized Routing
The various scenarios andcourse of actionwere capturedas part of interactive SOPs where any Case manager could easily
determine the course a particular request needs to take based ona particular scenario. The case manager team would route
(manually) the request to next stage andto get the request Right-The-First time, the requirements of each team were agreed to
avoid anyreferrals. Thisensured the Case Manager knows the course of a request and requirements to ensure there is no back
and forth.
 Introduction of Parallel Processing
Most of the processes at The Bankwere running sequentially. However, certainaspects of the process were made parallel. For
example: KYCandCredit review were made parallel andan agreement made that in case of anyrejection, immediate broadcast
wouldbe made for allthe teams involvedbythe case management team. Another instance is when Account Creation would
not wait for Credit Review to complete, but Credit could reject the workflow ticket in case the request was to be rejected.
Impact
The following are the anticipated benefits of this project (Quantification of benefits is in progress)
- 25% reduction in the onboarding pipeline volumes: Due to deployment ofthe prioritization and upfront approval
process incase of requests without clear trading intent, a number of requests well either be dropped or be put on
hold whichresults in reduction inNon-Value-Addvolumes. For example a bulk request with 100 funds to be on-
boardedwouldbe put throughapproval andSaleswoulddiscuss internallyand cut down the volumes to 20 funds.
These
- 20% reduction in onboarding TAT: Due to parallel processingat certain steps andcentral team to anchor the request,
the governance/escalationmechanism in case of bottlenecks, standardizedroutingenables reduction in overall TAT
reduction
- Minimized Touch points with Client/ Requestor Group: Since Only Case management would perform the client
communicationandcollection of data/docs (supportedbyRule Engine) the touch point by all downstream teams
were eliminated, which reduces hand-off and provides enhanced client experience
- Increased Right First Time Percentage: Given the route each request needs to trace and the contents of the
communicationduringrouting wasstandardizedthe referral rates woulddropdrasticallywhich wouldboost the Right
First Time request

10. Credits
Bibliography
1. Cline, Bill, 2014, Transforming Client Onboarding,
https://www.google.com.sg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0ahUKEwi70-
yXz8PPAhXKrY8KHf3SBGAQFghCMAM&url=https%3A%2F%2Fwww.kpmg.com%2FUS%2Fen%2FIssuesAndInsights%2F
ArticlesPublications%2FDocuments%2Fkpmg-client-
onboarding.pdf&usg=AFQjCNEtLxktUJZD0p38ugX14XBJzpHbYg&bvm=bv.134495766,d.c2I, Pg3
2. GlennBolstad, PacoHauser, RENÉ HÜRLIMANN, PhilipSchoch, WendySpires,2014, Converting Compliance in
Business ChallengesintoBusiness Benefits:OptimizingClient Onboarding in WealthManagement, WealthBriefing, Pg
12-14
3. “Wealth Management Onboarding:Expanding BeyondAccount Opening.”
http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=812
Author:
Editor:
AboutCognizant
Cognizant (NASDAQ: CTSH) is a leading provider ofinformationtechnology, consulting,andbusiness process outsourcing services, dedicated to
helping theworld’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion
for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative wor kforce that
embodies the futureofwork.With over 50 delivery centers worldwide and approximately 156,700 employees as ofDecember 31, 2012,
Cognizant is a member oftheNASDAQ-100, theS&P 500, the Forbes Global 2000, andtheFortune500 andis ranked among thetopperforming
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
Ram Dheeraj Gadiyaram is a Process Re-Engineering/ Analytics Consultant with Operations Change Group of
Cognizant with extensiveexperiencein Client Onboarding process. He has 8+years of experience in driving
operations change in IB ClientOnboarding, FI/EQSettlements, andvarious WealthManagement functions. He
specializes inconceptualizing, planning and executing transformational initiatives atglobal banks including Tier
1 Banks. Heis Six Sigma Blackbelt and holds a Masters Degreein InternationalBusiness from EcoleSupérieure
de Commerce de Grenoble, France.
He can be reached at: mailto:ramdheeraj.gadiyaram@cognizant.com;
Anurag Sharma is an Associate Director within Cognizant Business Consulting’s Strategy Business Process
Services Practice. Heis currently the EMEAProjectLeadfor Global Client Lifecycle Management program for
one ofthe largest Investment Banks and driving transformation and change initiatives for F2B Client On -
boarding Work stream.He has 14+years ofProcess Transformation andChange Delivery Experience working
for Global Banking Clients which includes ClientOn-Boarding,KYC operations andRegulatory Change. Besides
Black Belt, he holds an MBA.
He can be reached at: mailto:Anurag.Sharma2@cognizant.com ;
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