I hosted a dinner last night under Chatham House Rule (no quoting anyone) in a superb venue (Rules, the oldest restaurant in London, established in 1798).
The conversation was all about client onboarding and the challenge of keeping it fresh. You get the KYC info, and then the customer is onboard. But for how long? Is a 25-year deposit holder still the same person? Still trusted? Do you ever need to onboard again?
Interestingly, these questions are being asked by regulators. When MiFID (the Markets in Financial Instruments Directive) was introduced, there were so many significant changes that a big task arose called repapering. This would have involved re-onboarding every single client in the investment markets for every single firm, with new contracts (paper). The reason being fitness for purpose of the products being provided and a new need to KYC that those clients understood the risks they were taking. Luckily we avoided this, as the cost would have been HUGE, but it’s come back.
FATCA is a great example, where all transfer of funds require signed W8 or W9 documents. I know, because I keep getting them and we have no idea what a NFFE is, and whether it’s active or inactive.
So we start the conversation and it’s fascinating as there are so many facets to client onboarding.