Many risk and regulatory changes have investment firms looking more closely at risk management. And while risk management is an important part of the enterprise, it isn’t the only concern. Our guest blogger, Heather Adams, talks about challenges in balancing risk management with exceptional customer service.

Risk management and client onboarding

Client onboarding is a critical process for investment banks. Because it’s often the beginning of a relationship with a client, it’s important to create a positive customer experience—ideally, one that is personalized, targeted and relevant.

But what about effective risk management?

During onboarding, investment firms must consider a number of risk management principles. These include:

  • Conducting Know Your Customer (KYC) checks to verify a customer’s identity.
  • Setting up profiles to monitor and prevent money-laundering transactions.
  • Determining the credit worthiness of the customer.
  • Establishing appropriate credit terms and limits.
  • Using credit terms and limits to establish legal agreements.

While these steps are important to the investment firm, they can seem invasive, redundant or slow to the customer. For instance, it’s not uncommon for firms to ask clients for documentation—information that the client feels they’ve already provided. And, during the legal process, negotiations can take many months.

So what do you think should be the key focus for effective onboarding strategy? Can you balance effective risk management and exceptional customer service?

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