Client Lifecycle Management Process: 5 Best Practices for Banks

If you're worried about the potential for heightened regulatory scrutiny in financial services, you're not alone. Business operations teams everywhere are focused on the end-to-end, client lifecycle management (CLM) process as they cope with ever-changing regulations governing how, when, and where client data can be stored and accessed.

It's hard to stay compliant when customer data is spread across multiple operational silos. Financial institutions are facing growing regulatory and business pressure to streamline Client Lifecycle Management (CLM) from start to finish and gain a more holistic view of customers as they move from onboarding to offboarding.

In this blog, we'll take a closer look at the challenges of automating the customer journey and highlight best practices that can help banks get the most out of CLM process automation.

The customer lifecycle management process focuses on customer relationship management from end to end , including everything from the first interaction with a potential customer to winning and retaining them through the entire customer lifetime. It all starts with understanding clients and their needs, communicating with them at their convenience, and making sure all the legal boxes are ticked. Ultimately, modern CLM is about using digital tools to improve customer retention, build lifelong customer loyalty, and deliver superior service.

Elevating operational efficiency is where customer lifecycle software comes into picture.

CLM software and related tools can transform the way banks interact with clients in terms of personalizing the client experience, maintaining compliance, and monitoring and improving customer lifecycle management. So, what's the playbook for using digital technology to make CLM processes more efficient?

The lifecycle management process should also include digital platforms and tools. Banks can use social media platforms, online surveys, and mobile applications, for example, to gather feedback and information about customer preferences. They can use digital tracking and analytics tools to monitor customer interactions and behavior. It's equally important to build an organizational culture that sees understanding customers and their needs as essential to fortifying customer loyalty and growing lifetime customer value.

It's hard to talk about CLM without talking about effective communication. Communication is a crucial part of lifecycle management throughout the entire customer journey, from first contact to ongoing account management. Clear and open dialog helps to build trust and lasting relationships with customers. It also ensures that customers know what's happening with their accounts, minimizes the risk of frustration and disputes, and helps banks identify opportunities to offer additional services.

So, what strategies can your organization use to communicate more effectively through the CLM process? First, consider taking a broad approach across traditional and digital communication channels. This is a good way to ensure customers can set their communication preferences to get the service they need at their convenience, whether they prefer to speak on the phone or use self-service resources. Next, communicate in jargon-free, easy-to-understand language. Finally, acknowledge that communication is a two-way street. Communicate regularly with customers, and seek customer feedback as well.

Building customer trust is always a crucial part of effective communication. Because this requires transparency, minimize surprises by providing clients with timely, convenient, detailed information about their accounts, including fees and charges, so they can make informed decisions. Actively listen to customers' concerns and provide timely responses, including proactive customer service when possible. Finally, train customer service teams to use personalized communication and service to show that you care about your customers' financial well-being.

Personalization is another important part of the client lifecycle management process for banks. Think about it: Every individual customer and institution has different preferences, needs, and goals when it comes to their finances, so a one-size-fits-all approach won't do. By personalizing the client experience, banks can show that they truly care about their customers and are willing to go the extra mile to provide a seamless customer experience. It's also worth noting that personalized experiences can lead to increased customer satisfaction, reduce customer churn, and support new revenue streams.

How can banks do a better job of personalizing the customer experience? One way is through leveraging technology to gather and analyze data about client interactions, including their preferences, behaviors, and needs. This enables a bank to provide targeted and personalized recommendations, special offers, and advice.

Understanding the unique needs and goals of each client is the starting point for customer touchpoints that stand out from the crowd and build strong customer relationships. Send welcome messages to new clients outlining the services and products that are specifically relevant to them, for example. Or offer proactive alerts to customers who are close to exceeding their credit limit or have an upcoming bill to pay. In any case, technology can help banks create and personalize the client journey for a more customized, positive experience.

With the numerous laws, regulations, and policies governing the banking industry, staying compliant throughout the customer lifecycle management process is an ongoing and complicated challenge. It's not only required by law, with severe penalties for non-compliance, but also key to protecting clients' financial interests and maintaining the overall integrity of the banking system. This is why leading banks consider compliance an integral part of the client lifecycle from initial onboarding to ongoing account management and transactions.

Intelligent document processing (IDP) technology can strengthen regulatory compliance through artificial intelligence (AI) that automates and facilitates document workflow. Many leading companies in the financial services industry are using IDP's AI functionality to automate the classification and processing of documents in a consistent and auditable way.

So, how do you turn compliance into a CLM asset? Start by establishing a culture of compliance within your organization. Create an environment where compliance is valued and prioritized, from the boardroom to the office floor. Senior leaders can help by regularly communicating the importance of compliance and reinforcing it by giving employees regular training on policies and procedures. It's hard to excel at CLM without implementing policies, procedures, and controls to identify and mitigate risks and regularly reviewing and updating them for relevancy.

Leading banks use automation tools to streamline key parts of CLM, such as the initial steps in the Know Your Customer (KYC) process to prove a customer's identity. The KYC process helps banks and financial institutions prevent financial crime while improving the client onboarding process.

Banks can reduce attrition and build stronger client relationships by prioritizing personalization and communication to create positive customer experiences. Fast, frictionless processes are essential to doing that. The path to success is an AI-powered process automation platform with low-code capability and the speed and agility to customize the client journey and maintain compliance with fast-changing regulations.