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Compliance, Efficiency, and Service Can Co-Exist in High-Risk Account Onboarding

One of the most challenging aspects of underwriting and validating high-risk accounts relates to the collection, management, and evaluation of customer data

To adhere to the complex web of regulatory and compliance protocols, serving high-risk accounts require extensive due diligence, which can result in a customer interrogation process that can drag on for weeks or months, creating unwanted confusion and frustration.

For banks serving high-risk lines of business, such as the legal cannabis industry, simplifying and improving the customer onboarding experience can be a significant competitive differentiator. Recognizing the need for banks to deliver a better customer onboarding experience, Shield Compliance recently released Shield Engage to facilitate the new client application and underwriting process between marijuana-related businesses (MRBs) and financial institutions. Shield Engage offers a simple and secure customer experience tailored to meet the compliance demands of cannabis industry banking partners.

As more states pass cannabis legalization laws and consumer acceptance grows, competition for the best cannabis customer accounts is set to increase rapidly. Here’s how your financial institution can benefit from a streamlined customer onboarding approach.

Keep clients moving through your application process.

Applications from high-risk customers require extensive due diligence before account opening, which often results in more documents requested, and greater examination of beneficial owners. Client documentation and data requirements should be informed by what the customer has shared with the banker – not by lengthy onboarding checklists. By using technology to embed customer responses and associated logic in the application, customers can be presented with only the requirements that directly apply to them, reducing the time spent onboarding new customer accounts.

Facilitate collaboration.

A high degree of collaboration is required for high-risk accounts – by both the applicant and the financial institution. While there may be one person responsible for getting the application into the bank, there may be many people within the customer’s organization responsible for different parts of the application. By automating data collection, banks can facilitate cooperation within the applicant’s business to drive efficiency. On the bank’s side, there are often multiple groups -- such as the sales team, the compliance department, or an oversight group – that may need to review and approve high-risk account applications. Technology can help banks create a more seamless process internally that allows them to be more responsive to the customer and approve applications more quickly.

Decrease time in the sales cycle to close accounts faster.

Unlike traditional business or consumer applications where accounts can be opened quickly based on customer responses, the information provided by high-risk customers may raise additional questions and require the collection of more information. By facilitating that back and forth within the application process and not creating a separate workflow or workstream outside of the secure application process, banks can speed up the application process and onboard more customers more quickly.

Rather than allocate costly human resources to the time-consuming task of data collection and validation, technology can be leveraged to automate this process, freeing bankers up to spend more time delivering an exceptional customer experience. Engaging early on with experts can help banks create a compliance and operational model that works for them – starting with the customer onboarding process.

Shield Compliance is transforming the way financial institutions manage risk, comply with regulations, and satisfy operational demands associated with serving the legal cannabis industry. Shield’s technology sits behind the financial institution, powering its compliance and risk management operations in the background. This approach enables financial institutions to grow their portfolios and gain an early-mover advantage on new relationships and the added revenue that comes from these customers while protecting themselves from the risk associated with banking this industry.

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