5 ways buy-side firms can get ahead with buy-side account opening

5 ways buy-side firms can get ahead with buy-side account opening

For buy-side firms still struggling to meet the requirements of the initial margin phases, compliance is going to become increasingly difficult. As such, new arrangements with their dealer counterparties and custodians in order to comply with the initial margin requirements should be at the top of buy-side firms’ list of priorities. Especially now that the deluge of buy-side account openings is in full swing and time is of the essence to leverage digital tools for optimized processes.

Five ways to get ahead of account opening obligations and challenges.

1. Recognise customer-centricity starts before the trade

The 2020 margin rules predominantly impacted existing customers, making it difficult for their loyalty not to be challenged. This emphasized the importance of customer experience – which should not be underestimated as the market becomes increasingly competitive. Your firm must prioritize customer service, to attract new, and retain existing customers.

2. Make account opening a differentiator

Opportunities for true and sustainable differentiators are few and far between as services and products become increasingly commoditized. With account opening customer experiences typically proving to be poor, making account opening a streamlined and positive experience really will set your institution apart, while most other buy-side firms simply just muddle on through.

3. Embrace a data-first strategy

Account opening is information intensive with needs changing according to risk profile, jurisdiction or type of collateral. By automating the extraction and capturing of data – even from PDFs, emails, faxes or images – buy-side firms can pre-populate forms and maintain an audit of data requests. Data will then also be validated and can be repurposed for when multiple account openings are needed. Such data solutions can also manage similar data requests from different departments such as finance and legal, creating golden copies, which help to ensure departments across your firm are operating from the same page.

4. Overhaul and optimize processes

Account opening is still highly manual and onerous in most buy-side finance institutions. Lots of different teams are involved, and processes are typically cumbersome and more ‘best we can do’ than ‘best practice’. These processes need to be challenged. By focussing on the data and ensuring the right data gets delivered, in the right format, at the right time, you can challenge existing processes and optimize them.

5. Start now if you haven't already

A data-first approach to account opening is an opportunity for buy-side firms to transform their account opening processes, focusing on effective customer management and ensuring over-the-counter derivatives trading is not unduly impacted. With a proper and efficient approach to account opening, buy-side firms should be able to meet initial margin phasing requirements now and in the future, should requirements need further adjustment.

For example, from 28 May 2024, all US and Canadian securities trades must settle one day after trading. Or, as it will be known, on a T+1 basis. We have created a T+1 blog series, evaluating its impact on post-trade processes. Read our latest blog to find out how T+1 will affect account opening processes.


While the 2020 initial margin phasing deadline has passed, buy-side firms should still view the change in account opening requirements as an opportunity to move onboarding clients to a two to three day process, rather than four to six weeks. By taking the steps necessary to optimize processes, firms can be confident that should further amends need to be made in future for new regulatory requirements, these can be tackled swiftly and efficiently. Simply by virtue of their existing processes – like account opening – being swift and efficient. After all, no account means no trade, so a streamlined account opening process can only benefit buy-side firms and their customers in the long term.

If you would like to learn more about data automation tools and how they can help you optimize your business, visit our data automation platform page, or get in touch with our team of experts today.

NOTE: This blog was first published in 2018 but has been updated in 2023 to reflect industry changes and recent regulatory updates and trends.