Survey of Financial Sector Professionals Highlights 5 Key Onboarding Challenges

According to a study conducted by Muinmos, a leading RegTech firm that is the developer and provider of the Muinmos Client Onboarding Platform, and included 103 professionals in the financial sector, the 5 key challenges financial institutions face when onboarding new clients are:

1. Complex Regulation

Unsurprisingly, 42% of respondents cited the complexity of regulation as a significant challenge. With regulators and legislators ramping up legislation in many areas worldwide, especially around crypto-assets and technical standards, keeping up with the constantly changing regulatory landscape while ensuring compliance can be quite a challenge, even for larger financial institutions.

2. Slow and Complex Process

Many financial institutions still onboard new clients using a series of manual steps, extensive documentation, and lengthy back-and-forth, making the entire process unnecessarily slow and arduous. This results not only in a negative customer experience and can affect the institution’s ability to attract and retain new business, but also in internal burn-out. Slow and compelx process was a challenge mentioned by 24% of the respondents.

3. Data Management and Integration

Financial institutions deal with a large amount of data from different sources during onboarding. According to 18% of respondents, managing and integrating this data efficiently is a significant challenge, requiring the implementation of robust systems and processes to ensure data accuracy, security, and compliance.

4. Customer Churn

The onboarding process is often long and complex, which can lead to high churn rates. Clients may become frustrated with the bureaucratisation and the process, representing a significant loss of business opportunities for institutions, and causing constant friction between Sales and Compliance functions. 

8,4% of respondents raised customer churn as a significant challenge.

5. Markets in Crypto-Assets (MiCA)

MiCA could have easily found its way into the first challenge above (Complex Regulation), but since some participants specifically mentioned it, it is more than fitting to provide it with its own place. The Markets in Crypto-Assets regulation establishes a more stringent regulatory framework for crypto assets and related services, creating a series of new requirements and responsibilities for practitioners in a field that was largely unregulated until not long ago.

Reg? Tech!

Humanity has been using technology to solve problems since, well, ever. The above mentioned challenges, called by regulation, are not different, and companies who solve regulatory problems with technologies are called “RegTechs”. Come see how the onboarding platform of Muinmos, a RegTech pioneer, can help you overcome the above challenges and more, on www.muinmos.com.