Banks and exchanges are looking for effective ways to save time and money, while enhancing the quality of their business processes and client relationships. But often they get tied up in managing routine (yet essential) tasks that distract them from these goals.

Introducing automation into routine activities such as client on-boarding and certification testing may help firms get back more time and resources to devote to business growth. Not only can this approach help lower your operating expenses, but it can also speed time to revenue by eliminating delays and customer backlogs. Furthermore, automated onboarding can help you become more attractive to clients through offering them a better customer experience and a more streamlined process to begin trading.

The Problems with Manual Certification
Certifying new clients can be incredibly time-consuming when handled manually. Managing this process without automation can introduce some major backlogs and cause clients to quickly grow dissatisfied with inefficient service. When certifying a new connection manually, any area of non-conformance between the systems has to be discovered one message at a time. Not only does this approach become frustrating and drawn-out for clients that want to get set up as fast as possible, but it also puts you behind on adding new business.

Manual certification can also put a major strain on employee resources. They have the constant headache of working around client schedules to set up meetings each time a new conflict arises during testing. This of course becomes particularly challenging when you are dealing with counterparties in other parts of the world.

For instance, say you are a bank based in the US, and you’re on-boarding a client located in Singapore. If you are on-boarding this client manually, it could take weeks to certify them. This is because each time an error is encountered during testing, the test has to be stopped so that IT can identify and fix the problem. Once it’s fixed, the on-boarding specialist has to schedule a new testing time with the client. This can be a hassle when you are working in different time zones. Once the call takes place, testing can resume. That is, until another roadblock is reached, causing the process to repeat itself.  At Lasalletech, we refer to this challenge as the “ping pong” effect. However, the difficulty does not stop at initial on-boarding. In a manual world, you would constantly be working around each other’s schedules in order to perform certification tests over the phone each time this client wanted to access new markets or asset classes.  

Automate to Speed Time to Revenue
Introducing automation can help you get clients on-boarded and certified faster, ultimately improving their user experience and speeding up your time to revenue. One of our clients, a tier 1 sell side bank said automation has helped them reduce on-boarding time by 66%. In addition, instead of on-boarding clients over the phone one at a time, they have been able to on-board as many as 20 or 30 at a time.  

With automated certification, upon adding a given client to your certification system, they can get started right away. They will be able to access your online FIX spec (kept up-to-date more easily if you use FIX Explorer), begin making any necessary code changes, and configure their FIX engine. Then, they can connect to the certification system and start the certification testing at their convenience.

Automation takes the need for scheduling out of the equation. As the client works through the certification process, if they run into a problem or error, a notification will pop up on the sell-side onboarding specialist’s screen, giving them the opportunity to call and promptly address the issue with the client. This way the sell-side will be able to work through the problem right away, providing just-in-time support to the client. If the problem lies in the buy-side setup, they can stop the certification process, make the needed changes, and re-start certification where they left off, at their convenience. If the sell-side team needs to make changes on their end, then as soon as the issue is rectified, a message will be sent to the client allowing them to continue their testing activities at the time they choose.

Perform Sophisticated Scenarios
A drawback of relying on manual on-boarding and certification testing is that it prohibits you from testing more complex scenarios. When testing manually, operators will typically evaluate very simple cases since setting up everything manually is incredibly time-intensive. On the other hand, an automated test can easily automate the entry of tens or even hundreds of data points for tests that are closer to real world scenarios.

For example, if you’re testing an allocation manually, you might only be able to allocate one or two trades to one or two accounts at a time. By automating allocation testing, you can input a real account allocation message, and test it against an actual scenario—instead of using a sample size that is too small to offer any genuine insight. This makes the test more realistic, more efficient and less subject to error.

Spend More Time on Innovation
In terms of business advantages, automation can help IT professionals that were once heavily focused on testing and certification spend more time on development that supports customer acquisition and retention. These professionals have extensive experience working closely with your clients, guiding them through such activities as on-boarding. They likely have a good deal of insight into client needs and what key differentiators your bank or exchange could potentially offer. If they’re not spending so much time on manual processes, these employees will be freed up to refocus their knowledge and talent on innovation that can help the firm attract and retain more business, as well as increase flow from existing clients.   

Competitive Differentiation
Sell-sides are looking for innovative ways to differentiate themselves. Some firms have elected to automate important, yet routine tasks, such as client on-boarding and certification testing, which were once incredibly time-consuming and inefficient.

A common misconception is that automation makes the client experience impersonal, but this is not the case. Instead, it merely speeds the process along, automating the simpler and repetitive activities, while allowing for one-on-one interaction for more complex issues. This approach is appealing to customers because it allows them to certify and begin trading quickly instead of waiting weeks or months to get started. Plus, using an automated interface affords IT staff full visibility into the exact screens clients are seeing during certification testing, helping them avoid any miscommunication and offer the best possible support.  

More and more, firms are finding that a sophisticated client on-boarding and certification testing program is helping them differentiate themselves in the face of a fiercely competitive marketplace. Introducing automation into this process helps banks and exchanges alike get more clients on-boarded faster, speed time to revenue, and have more time and resources available for focusing on growth objectives.

For more insight on automated on-boarding approaches, check out our exclusive LinkedIn group, Automated Certification & Testing. If you would like to join the group, please contact [email protected] or visit the group here.