Capital Markets Insights

Modern Investor Onboarding – 4 Methods Katipult Uses to Bring Your Investor Onboarding Process into the Frictionless Digital Era

Nineteen. That’s approximately the number of paper forms an institutional investor interested in subscribing to a private placement must fill out. From certifying beneficial ownership to confirmations that they have sufficient anti-money laundering guidelines, even getting past the first step can be a major hurdle. 

Each of those many forms represent potential errors and omissions that could require multiple back-and-forth to rectify. The result? A plodding and arduous onboarding process that wastes time on both sides (and that nobody likes doing).  And we haven’t even reached the actual process of subscribing to the actual private placement itself, which is another challenge entirely.

Things are a little easier on the retail side, as there are much fewer forms to fill out. The bad news is that – unlike institutional investors – retail investors can decide to simply abandon the onboarding process. 

After all, retail investors are much more likely to behave as consumers. And in an era where fast and frictionless is the name of the game, it should not be a surprise if these investors elect to give up halfway through. How many investors are financial institutions losing each year to this “onboarding churn”?

Bringing Investor Onboarding into the Modern Age

At Katipult, we believe that the traditional onboarding process for private placements is severely out of step with the modern age. It not only leads to bottlenecks, delays, and dropouts, but also dissatisfaction – both for the investors and the compliance staff processing the forms. 

That’s why we created a fully integrated platform for investor account openings and renewals. Fully customizable, it is specifically designed to match your current onboarding process and create a digitally streamlined version of it. Our goal is not to radically alter your onboarding process – just make it faster, more efficient, and with fewer chances of errors or omissions.

Here’s four methods we use to do just that.

#1 Conditional Logic That Streamlines, Simplifies, and Shortens

A significant part of what is contained in the “full package” of onboarding forms is completely irrelevant. The catch is that which part is irrelevant differs depending on the type of investor. That’s where conditional logic can help.

The moment an investor selects the first couple details on one of our digital “smart” forms, the rest of the onboarding fields are automatically changed to match that specific investor profile. What Investor A – say, a Canadian private company – sees will be very different from what Investor B – say, an offshore non-regulated entity – sees.

This means investors only see fields that are relevant to them. The result is an onboarding process that is objectively shorter, simpler, and more streamlined. And there’s a subjective benefit as well – improved certainty. Because the investor can see a “progress bar” and the number of remaining steps left in the process, they know exactly how much they have left and are thus more likely to see it through.

#2 A Guided Process Minimizes Mistakes and Omissions

What happens when an investor misses a mandatory section in a paper form or fills it in wrongly? Nothing – and that’s a problem that leads to errors and omissions.

Our platform cuts down on errors and omissions in two main ways – sanity checks and drop-down lists. The former means that users will not be able to move on to the next part of the process if certain fields are not filled out. Meanwhile, fully customizable drop-down lists create guardrails that reduce errors by limiting options.

And when mistakes do occur, they can be easily and quickly corrected – unlike in paper-based processes – thanks to our centralized hub.

#3 A Centralized Hub for Easy Tracking and Follow Up

Katipult’s onboarding platform comes with a centralized dashboard that allows you to track the real-time progress of every investor currently going through the onboarding process. From that hub, the relevant compliance staff can easily approve or deny applications – or provide feedback to rectify certain errors or request for additional information.

This makes things so much smoother for both the compliance function and the investors. Plus, it automatically creates a proper database of onboarded investors, which is helpful in the case of any audits. And when a year passes and it’s time for renewal, all that can also be managed via the central dashboard.

#4 Multiple Account Support Without Needing to Refill Information

One investor may wish to hold multiple accounts – such as a tax-advantaged and regular margin account. With our onboarding platform, investors can set up and access these accounts from a single user ID. And the best part is that when creating additional accounts, investors don’t need to reenter information that has already been recorded as part of previous account creations. Only new information pertaining to the additional accounts need to be filled out, making it fast and easy.

Remove the “Digital Transition Risk” With Our Customized Process

The truth is your legacy paper-based onboarding process is probably working. It may not be the fastest or most efficient, but they eventually get the job done. And multiple parties you liaise with, from your compliance staff to brokers, are likely already familiar with the process. You may thus be concerned about “digital transition risk” – will all the parties involved find the transition into a digital process too jarring?

At Katipult, we respect the seriousness of this “digital transition risk”. That’s why, when clients choose to use our onboarding platform, we work closely with them to create a unique version of the platform that can map their specific paper-based process almost exactly. 

If you want a question phrased a certain way – because that’s what everyone is familiar with – that can be done. If you want the sequence of questions to follow a certain order, that can be done. Our proven implementation process also includes test runs, team training, and soft launches with select clients to further ensure the smoothest transition possible.

This is why Tier-1 clients like Cormark Securities choose us to modernize their investor onboarding process. Contact us to learn more.