25% cost saving in wealth management onboarding in 6 months

Challenge

In 2016, a Tier 1 Global Bank headquartered in New York (and our second largest enterprise engagement) approached Arachnys to help with the onboarding of high risk wealth management customers. We were thrilled to have been selected, especially as the client wished to productize their requirements in order to meet market needs, using a one-team agile approach to implementation.

The client team consisted of 250 highly skilled analysts carrying out EDD and QA situated in the UK, the USA and Singapore, and the bank also had budgets to consider; they had to meet cost reduction targets of 10% year on year for three consecutive years.

There were operational challenges in onboarding these high risk customers, as the client had to consistently meet regulatory requirements for high risk Enhanced Due Diligence (EDD). This would require a standardised risk-led approach to investigations which adhered to policies and processes for all regions and jurisdictions.

“To stay ahead, we know as a bank that we have to stop bad people doing bad things – that’s how regulation will trend.”
– Chief Administrative Officer

Solution

The EDD requirement had such depth and breadth that it was particularly challenging for the bank. They needed to search beyond standard adverse media providers to determine detailed risk factors, including if clients had been convicted rather than held under suspicion. This meant the searching of local court registers. Arachnys digitalized all of these processes, creating a streamlined approach to ensure complete policy adherence.

Our ‘one platform’ approach to EDD has benefitted the bank in other ways too. The bank could now use data to justify changes in policy around the adverse keywords used throughout the process. Some keywords were found to be triggering false positives, but the Arachnys platform assisted the bank in reducing 45 adverse terms down to 25, allowing analysts to spend more time on valuable research than reviewing these false positives.

Arachnys then helped conduct a review of every policy for each country around the world – a total of 8 processes with 900 permutations. This implementation took place over three months and, once live, the bank chose to leverage Arachnys beyond onboarding for a complete entity-led approach. In addition to running EDD only at the point of KYC, they were able to run another research report if an existing client crossed the high risk threshold, thus needing further EDD.

To remove the completion of entire files from scratch, we productized a customer-centric architecture for the bank to search only the additional information needed. The full integration with their internal systems was completed within 6 months, and Arachnys continued to provide 24 hour production support for the bank’s now strategic platform. The success of the project led to Arachnys being featured on the bank’s intranet homepage as “the best vendor relationship we have ever had”.

Results

  • Reduced, and far exceeded 10% cost saving target with a 25% cost reduction recorded within 6 months.
  • The client recorded a 73% reduction in QA failures in the same time frame.
  • Increased efficiency – all investigation results were stored as a basis for analysing the delta, and reducing the time for future investigations.
  • Go-live 12 weeks from contract signature to fully live platform.