February 09, 2011

With the financial industry focused on restoring client trust, indolent on-boarding processes are coming under fire. "For example, we've studied on-boarding when rolling 401(k) funds into an IRA," says Michael Ellison, president of Corporate Insight. "In some cases it can take up to 30 days to complete, during which time assets are inaccessible. This is clearly a frustration that financial firms must address."

Indeed, those firms that fail to address such consumer frustrations risk losing their customers. According to a recent Datamonitor study, post-crisis financial services clients are more willing than ever to shop around.

"At a minimum, many firms have recognized the problem with on-boarding inefficiencies and delays," says Doug Dannemiller, senior analyst for Aite Group. "Now it's about combining processes and technology to create solutions."

Of course, that's easier said than done, Dannemiller affirms. "To solve the problem for all asset classes will require multiple technology providers," he says. "The key is identifying the right project and defining appropriate scope, which will be different for different firms."

One firm that is closing the on-boarding expectation gap is Raymond James Financial. Its Private Client Group (PCG) is transitioning from traditional postal-mailed forms to an online system for keying asset transfer requests directly into the Automated Customer Account Transfer Service (ACATS). ACATS is a service of the National Securities Clearing Corp. in New York.

Trashing Paper Forms

As exepcted, this is no small initiative for the St. Petersburg, Fla.-based financial adviser, where about 5,300 individual advisers spread across 2,300 branch locations are accustomed to manually filling out nearly 1,200 types of Raymond James-branded forms, according to Tom Loney, senior manager of IT architecture. "As an institution we've been very paper-based," he admits. "While some paper documents are necessary from a regulatory standpoint, we needed to begin streamlining processes for moving new account information into the home office, having it transact with home office systems and providing transparency along the way."

To tackle the transformation, Raymond James divided the initiative into two challenges. The first was to significantly reduce the time between forms being completed by branch office advisers and the data from the forms appearing in home office systems. The second challenge was permitting online entry of on-boarding information, bypassing paper altogether.

Among other steps, solving the first challenge required Raymond James to establish an internal data repository for on-boarding information and to provide a mechanism for branch office personnel to transmit information into the repository. Although document scanning seemed like the logical transmission technology, there were hurdles in the field, explains Chris Tharp, Raymond James' senior manager of product management.

"We already had a scanning system in place at our headquarters," he says. "But many of our branch offices didn't have compatible scanners or the technology to transmit scanned data." Since all of the branches did have fax machines, however, the solution was to include a fax-enabled front end that could later be transitioned to scanning, Tharp recalls.

For the document repository, Raymond James evaluated four prominent technology vendors before electing to build an in-house solution using Microsoft (Redmond, Wash.) tools. "The document management players were somewhat monolithic," asserts Loney.

"On the other hand, we have a well-developed Microsoft infrastructure," he adds. "Plus, we're already using SharePoint quite extensively for collaboration. So extending our existing platform to manage on-boarding documents seemed a natural progression."

Yet SharePoint's basic check-in/check-out capabilities were insufficient for the complex workflows necessary to meet regulatory demands, acknowledges Loney. "To supplement, Microsoft recommended K2's [Redmond, Wash.] blackpearl, which we evaluated and adopted," he says, adding that the web-based K2 software helped Raymond James develop the process.