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Table of Content

What does Client Lifecycle Management (CLM) software do?

Is CLM software needed for retail banking?

Is CLM software needed for private banking?

Do neo banks need CLM software?

CLM software for wealth management

Do financial advisors need CLM software?

Is Atfinity a CLM?

CLM software - Clients, Customers, or Contracts?

Conclusion

ARTICLE

Do All Banks Need CLM Software?

A common issue financial institutions face is that their customer data is completely fragmented across the customer’s lifecycle. This means that it’s a lot more difficult for the bank in question to properly onboard, monitor, and otherwise engage with their customers effectively. The solution: Client Lifecycle Management software.

Client Lifecycle Management software, hereafter referred to as CLM software, offers banks and other financial institutions the option of fully controlling the client lifecycle and the associated processes – such as onboarding or perpetual KYC. However, unlike core banking software, CLMs can be seen as auxiliary, as many of its features can be handled by different pieces of software.

Therefore, is CLM software necessary or just nice-to-have additional software? The answer to this question largely depends on the type of bank in question, their clientele and business goals, as well as the specific CLM software they’re considering.

In this article, I’d like to take a closer look at CLM software, see what it has to offer, and discuss how different financial institutions could benefit from it.

Featured image for do all banks need CLM software featuring Thorben Croise

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What does Client Lifecycle Management (CLM) software do?

Fundamentally, CLM software does exactly what it says on the tin – manages client accounts throughout their lifecycle. This means that it handles onboarding, monitoring, revisions, reviews and off-boarding.

How exactly any particular software goes about achieving these tasks can vary greatly. For example, a very rudimentary CLM system might only provide a framework for tracking clients. On the other hand, a robust CLM system can provide key additional features.

There’s usually some form of automation to cut down on manual, repetitive tasks, a centralised database to easily oversee all existing accounts, and predefined triggers for periodic account reviews.

Lastly, depending on the specific build of the CLM software you choose, there might be more niche options, such as individual reminders for high-priority clients such as mass affluent individuals.

With all of that being said, CLM software does differ a lot. And depending on the type of bank in question, some of these features will be more or less useful. Let’s go through a few examples.

Is CLM software needed for retail banking?

Retail banks typically handle the largest number of customers as they don’t require a wealth threshold, unlike a private bank or a family office. In Europe, a single branch of a retail bank can have between 5 000 (like in the UK) and 15 000 customers (like in Estonia).

All of this is to say that retail banks need to log and monitor a lot of information. This is especially true once compliance is also taken into account, with KYC being very resource-heavy in the absence of automated background checks and account reviews.

On top of that, at their physical location, processes such as onboarding have to be as quick as possible so that there aren’t massive queues. However, if the onboarding process is mostly manual, each customer can take up a solid chunk of time.

This problem is also put into perspective by the emergence of neo banks, which typically use automation to speed up the entire process significantly and offer more convenient options, such as self serving through user portals.

In other words, a CLM system is typically necessary. Otherwise, too much time and manual labour would go towards logistical issues, and the slow process times would give more digitally-advanced banks an advantage.

A case could be made for retail banks that have a smaller number of clients. However, the end-goal of any retail bank is to grow in size. Therefore, even if it currently has a manageable number of clients, integrating a CLM system is essential for future-proofing your business.

Is CLM software needed for private banking?

Seeing how private banks typically have a lot fewer customers than a retail bank, one would assume that their need for CLM software would also be less significant. However, that is not quite the case.

This is because private banks deal with high-net-worth individuals (HNWI) and thus the transactions going through the bank are both more complex and more regulated.

Namely, private banks must have an advanced KYC system, as large transactions will require a Customer Due Diligence (CDD) check. However, said check should also be as non-intrusive as possible as to not create friction with the customer. After all, losing even one HNWI client can be devastating for a private bank.

Imagine a private bank is doing business with a legal entity that has a complex, multi-layered structure. To both stay compliant and avoid customer frustration, the bank would have to be able to perform KYB checks quickly and effectively, combing through multiple levels of their ownership structure and properly collecting all the needed information.

This can translate to dozens of different KYC checks across multiple different jurisdictions! Therefore, utilising automation and CLM software to efficiently perform Perpetual KYC can be a huge benefit.

In other words, while they have fewer clients, with the regulations being more strict and the expectations being higher, most private banks will still need CLM software to avoid losing clients.

Do neo banks need CLM software?

Just like traditional retail banks, neo banks tend to have a large number of customers, with one of the largest (WeBank) reported to have over 300 million users in total. Therefore, on this basis alone, our initial argument carries over, as this large of a customer base necessitates a CLM system to centralise all of the data and automate certain processes such as onboarding.

However, neo banks have an added incentive. Namely, one of the main draws of neo banks, when compared to traditional banks, is that they’re more tech-forward. And in the absence of automation software, that’s usually under the umbrella of CLMs, a neo bank might lack what its customer base is looking for.

Therefore, neo banks typically want CLM software with solid automation options, to fulfil the promise of a fully-online, fast, and convenient banking experience. Furthermore, CLM software can also help streamline key processes, such as e-signatures and self-serve user portals, which is a big plus.

CLM software for wealth management

Wealth managers run into a similar issue as private bankers, as there is significant overlap between the two. Namely, they have a smaller number of clients, however, the transactions being processed are typically a lot more complex than what you’d see in a retail bank.

In fact, it’s not uncommon for wealth managers to have a wealth threshold for taking someone on as a client. To these ends, wealth managers often target ultra-high-net-worth individuals (UHNWI).

On top of that, wealth managers typically handle more complex processes that require detailed knowledge of the client. For example, investment options, legacy planning, insurances, portfolio management, wealth preservation and so forth. And this information can sometimes be time-sensitive – for example, if the wealth manager in question is handling stock options for their clients.

Therefore, having a centralised database where all of this information can be properly logged is essential. This is especially important if the wealth manager takes on a larger number of clients, as they can then categorise them according to key criteria, making sure not to overlook any important clients.

All of this is to say that a wealth manager will at the very least greatly benefit from a CLM system. It can centralise and catalogue all of this information about each individual client and ensure that Customer Due Diligence is executed precisely and efficiently.

Do financial advisors need CLM software?

Lastly, we come to financial advisors. While this isn’t always the case, which we will discuss in a second, financial advisors are arguably the only financial institution that could potentially do without a CLM system.

That’s because they typically don’t have as many clients as a retail bank and they don’t necessarily handle processes that are too complex, like wealth managers. In some cases, even regulations surrounding compliance might be simplified when compared to the other institutions we’ve covered so far.

Therefore, a case could be made that CLM software would not be all that impactful.

However, it’s important to note that what a financial advisor handles will vary a lot from one institution to the next. On top of that, the clients they take on will also vary. For example, a financial advisor that only has 20-30 medium-risk clients likely wouldn’t need specialised software to keep everything running smoothly.

On the other hand, an advisor handling over 100 high-risk clients could benefit greatly from a tailored CLM system to keep everything up to code and in-check.

Therefore, financial advisors are a bit harder to pin down, as there are large discrepancies. However, the goal of any business is to scale up. Whether that means offering more services, better services, or servicing a lot more clients, CLM software can help streamline the process.

Is Atfinity a CLM?

So, how does our own Atfinity software fit into the picture? And is Atfinity just CLM software?

In short, Atfinity does offer Client Lifecycle Management features.  However, it also goes beyond just strictly that realm.

For one, its onboarding process is more advanced than your standard CLM. It uses an AI-powered rule engine to guide the customer through one step at a time. In other words, depending on how you fill out certain fields, new fields will become available – as opposed to presenting the entire form at once.

Atfinity also covers lending and loan origination. Therefore, if that’s a process your institution also offers, you don’t need separate software for it.

But the main difference between Atfinity and most CLM software is the build of the software itself. Namely, Atfinity was made with adaptability in mind. Firstly, it features an API-first design philosophy that lends itself to all important integrations (such as IDVs).

Secondly, it’s a no-code platform. Therefore, configurations can easily be made by the compliance team and not a separate IT department.

In conclusion, if you just want CLM software, Atfinity offers all of the features you need. However, if there are other areas you’d also like to cover, such as a smoother onboarding or lending, Atfinity has those areas covered as well.

CLM software - Clients, Customers, or Contracts?

Lastly, let’s clear up some confusion that may arise from the acronym CLM. Namely, when talking about CLM, depending on where you go, the acronym could refer to either Client Lifecycle Management or Customer Lifecycle Management.

And while these two phrases sound rather similar, and do have some overlap in terms of functionality, they are different. The simplest way to distinguish the two is by industry: Client Lifecycle Management is typically used within the B2B and finance world.

These industries typically have much more complex and detailed relationships with their consumers (when compared to a retail store for example, your bank has to be a lot more meticulous and attentive).

Customer Lifecycle Management software on the other hand is typically used when talking about B2C businesses. This software focuses more on the analytical side of things, tracking how people find your brand, when they convert, which marketing materials they have seen, and so on.

As you can see, there is still some overlap. A bank that utilises complex marketing strategies might need Customer Lifecycle Management software. Likewise, a retail store might want Client Lifecycle Software for their loyalties program or even when onboarding staff.

Furthermore, CLM can even stand for Contract Lifecycle Management. This can bring upon even more confusion, as this software is often used within the same industry as Client Lifecycle Management. However, we will note that Contract Lifecycle Management is typically reserved to legal and logistics areas.

Conclusion

Lastly, let’s answer the titular question “Do all banks need CLM software?”. And the best answer we can come up with is “All GOOD banks need CLM software”.

This is because, with the exception of smaller financial advisors who don’t take on larger clients, CLM software is essential for keeping up with the competition. Without dedicated CLM software, your processes are bound to be slower and more error-prone. And with there being plenty of other options, we’d imagine that most customers would take their business elsewhere.

Of course, an argument can always be made for making the software yourself from the bottom up. By using legacy software and brute forcing automations, it could be possible to recreate something similar to CLM software.

However, when taking into account how long it will take to get to market, as well as the maintenance costs and how any change in regulation renders your entire system at risk of noncompliance, we don’t think this is the superior option.

After all, if someone else can handle setting up a perfectly-optimised CLM system, as well as maintain and adapt it over time, that just gives your business more resources to focus on big-picture initiatives and upping your customer experience. In a rapidly evolving financial landscape, CLM software isn’t just a tool—it’s a necessity for staying competitive. With Atfinity, you don’t just get a solution—you get a partner in success.

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