Nowadays, businesses are facing a tsunami of processes that need their attention. Because of that, they often overlook some areas of their work. That’s why, as the glue that pulls everything together, Client Lifecycle Management (CLM) systems are becoming a new standard, making it possible to support clients throughout their entire lifecycle.
What is client lifecycle management
By definition, CLM is a system that gives businesses control to manage the client’s journey from onboarding to offboarding. It is essentially a case management system—homegrown and off the shelf—that links the front office CRM, where customers are managed, to the back-office, with its internal KYC processes.
5 ways to use CLM for more effectiveness
A CLM toolkit puts customers in the center of a single system and does all the work that needs to be done for these relationships, going beyond onboarding and KYC. Businesses use CLM systems to onboard, risk assess, and monitor customers while automating all client-related phases.
- For KYC and AML
KYC/AML often gets separated into multiple disjointed processes and unsynchronized data. Clients are often asked to submit extra data in dozens of different ways—via messages, emails, on paper, etc. One of the ways to bring such a chaotic infrastructure into order and avoid potential fallouts is by systemizing identity verification, real-time customer data monitoring, information storage, and client interaction into a single organism—CLM. - For Enhanced Due Diligence
Client risk status doesn’t stay the same throughout a business relationship. In fact, it fluctuates. For example, when a customer decides to deposit more money, or simply grows into a bigger company with more connections. More connections lead to more risks. CLM is often used to monitor these changes and evaluate the risks associated with additional sources of information (source of wealth, proof of address, etc.), ensuring compliance with regulatory demands and avoiding fraudulent activity on the platform. - For KYB
The corporate client check is not as simple as an individual KYC check. To verify a company, businesses need to verify the legitimacy of the company’s details (registration number, address, etc.) and the information on its UBOs (ID, selfies, PoA). Because of this, it can be practical to use CLM, which is able to evaluate the risks not only once, but throughout the entire customer lifecycle. In addition to this, CLM can specify certain details about a client and access any piece of information regarding profile due diligence. - For client support
Often, when customer success officers need to respond to a client’s request to approve a profile, they have to access the full picture and require all the relevant data at hand. This is not always possible with segmental solutions. In this case, CLM can be used to connect support with detailed information on each client and help solve the issues without leaving customers hanging. - For anti-fraud
Client lifecycle management cuts business risks. Let’s say you’ve had a promotional offer and have determined a winner. Using a CLM tool with an embedded anti-fraud system, you can make sure that the winner is somebody you can trust and filter out fraudsters according to your risk approach.
A correctly chosen and implemented CLM toolkit has the potential to improve the experience for both clients and grow bottom lines—let’s see how exactly.
The business impact of a working CLM system
As an example, banks and payment processors often have several different siloed systems in the back office. By using CLM tools, businesses are able to remove this disjointed work that happens across processes (manual, third-party, etc.) and systems, putting the customer at the center of this unanimous ecosystem.
- Lower costs
Centralized work through a single mean is generally more cost-effective than multiple, segmented solutions. A good CLM tool cuts errors, which helps to avoid compliance-related penalties. - Higher customer satisfaction and retention
The CLM flow minimizes customer engagement in operational matters that don’t necessarily require their attention to increase customer satisfaction. For example, it does this by only asking customers for only those documents that can’t be procured without their help. - Ensured regulatory compliance
The CLM environment creates consistent KYC and risk assessment processes for multi-jurisdictional and multi-product onboarding systems. It enables businesses to collect and verify data and documentation by the set standards and through multiple sources all within a single flow.
Companies tend to have the same goals: manifesting a frictionless end-to-end user journey, a premium customer experience, and a high operational efficiency. So, let’s talk about the plan that businesses need to draw up when starting to work with a CLM tool.
How to start working with a CLM system efficiently
If you are thinking of adopting a CLM system—you’ve taken the first step, and that’s good, but there is a lot to consider if you want to quickly identify your needs and build the ecosystem that will benefit your business the most.
1. Define the process and needs
Make sure to define processes and subprocesses in line with onboarding needs across all areas of the business. Ask yourself if you can modify your business processes for the better.
- Determine whether manual processes can be automated or eliminated entirely.
- Determine which processes can work in parallel to minimize sequential dependencies.
- Identify processes that can be globalized or localized. For example, reference data setup and credit review.
2. Choose a tool to help
Institutions use multiple applications for client data capture, data check, and validation—all of which can be rationalized into a single system.
- Evaluate the options in order to select software that is able to cater to your actual business needs.
- Check if the tool can be scaled to plug in new features and applications.
- Search for a dynamic user interface that can be customized depending on the region.
3. Set the rules for the flow
The right rules will allow efficient client data validation, compliant data processing, and record keeping standards to be built into a centralized system easily.
- Apply a common set of rules through all components of the architecture.
- Ensure a protected single point-of-access to sensitive information.
- All rules should be responsive to change, without a business having to rebuild the entire flow.
4. Take care of document processing
Manage documents better by institutionalizing the process.
- Establish an authoritative legal foundation for risk management.
- Build templates for all documents and reports required across client types and jurisdictions.
- Create an intelligent document tagging and storage facility.
5. Make sure onboarding is comfortable for your clients
Interface is what clients see when interacting with your system. Here, the ability to present information and set the flow in an efficient and helpful way is an important touchpoint.
- Ensure support of the clients at each stage of the onboarding process. For the client, the absence of clear information on the status of the onboarding becomes frustrating.
- Implement consistent reporting.
- Establish rule-based alerts for compliance managers to quickly control and manage risks without affecting the flow.
All in all, for ultimate efficiency, companies must look for trusted, scalable systems with pre-built rules and processes suitable for their business.
