The Xceptor Blog

New margin rules: A day in the life of an account opening form

07 June 2018

3 minutes read time

New margin rules in 2019 and 2020 will mean a significant increase in customer onboarding volumes. With customer centricity the mantra of digital transformation, what say we find a way to happier trading customers.

When it comes to account opening in investment banking, not much really happens in a day. For a form that can easily get rekeyed 15 times, think weeks rather than days.

New margin rules in 2019 and 2020 will mean a significant increase in customer onboarding volumes. This is because many buyside firms typically manage hundreds, sometimes thousands of legal entities – one for each of their client accounts, with each of these trades with multiple brokers. This breaks down into a heavy lift for the onboarding team.

Most of this onboarding will impact existing customers so banks would do well to refocus their energies on the customer experience in this business-critical area.

The onboarding customer experience is not typically a great one and a better balance needs to be found between operational effectiveness, customer experience and risk management.

Same data, just slightly different

Onboarding is still highly manual and onerous in most institutions. Multiple teams from credit, legal and operations perform different aspects and often ask for the same data, at different times, but just in slightly different formats. As a result, customers can easily – and quite understandably – become frustrated.

Moreover, the data needed changes according to risk profile, jurisdiction or type of collateral. From a client perspective, this is further exacerbated by the fact that compliance in different banks will see the same requirements through varying lenses.

Happy clients, happy front office

The margin rules have been phased in by the regulator in an attempt to lessen the burden. However, during the initial phases many dealers underestimated both the amount of documentation needed and the time required for onboarding.

This suggests now is the time to plan for the deluge that will be 2019 and 2020. This will enable your client onboarding to be a competitive differentiator, a positive experience and, just as importantly, help avoid a very unhappy front office.