Is 2021 when digital onboarding goes mainstream for wealth firms?

Montreal fintech says embracing data connectivity makes life more efficient and convenient for advisors

Is 2021 when digital onboarding goes mainstream for wealth firms?

Yves-Gabriel Leboeuf is the CEO of Montreal-based fintech Flinks, which counts Wealthsimple, Questrade and National Bank among its clients.


Open finance seems like it might just be for banks, but it shouldn’t be.

While retail banking embraced financial data connectivity years ago, Canada’s wealth management industry is finally catching up, and Canadian investors stand to benefit.

Once consumers are in control of their financial data and get to share it with the apps and services of their choosing, the industry will unlock waves of new services and experiences. Chief among them is a truly digital onboarding experience.

In short: 2021 will finally be the year where advisors are able to collect the information they need to open new accounts or transfer assets – in a matter of clicks and seconds.

Before open finance, open banking

Increasingly, it is becoming the norm for financial service providers to allow their clients to share information from their accounts with other financial institutions through dedicated digital channels.

This allows them to consolidate scattered data into a unified view, digitize manual processes such as identity or account verification, or develop entirely new products.

This type of financial data connectivity has quickly been embraced by waves of fintech apps and services, but it has also grown in popularity among more established institutions over the past few years. As a result, millions of consumers have opted-in to connecting their financial data and information in order to simplify access and control over their finances. In fact, 64% of consumers worldwide have used one or more fintech platforms in 2019 —a 33% increase from 2017.

In Canada, Wealthsimple has become a poster child for apps that utilize their users’ data to streamline their experience. Perhaps in a less overt way, more mainstream institutions have successfully digitized their business processes as well. EQ Bank, for instance, uses financial data connectivity as part of a digital mortgage application process. They source financial information and documents directly from the hopeful homebuyers’ accounts, including original bank statements.

Up until recently, open finance covered only retail banking accounts, leaving other sectors watching from the sidelines.

Redefining digital onboarding for wealth firms

Flash forward to now, and wealth management firms are able to start playing with data connectivity as well. This has major implications as to how financial information is accessed and used to serve clients.

Research conducted by Broadridge Financial Solutions has shown that investors often complain that the client onboarding experience consists of numerous, cumbersome and dated forms with repetitive questions, signatures and too much back-and-forth on documents. Clients whose assets are spread across multiple institutions face additional steps if they want to transfer them, or even provide a degree of visibility to their advisors.

Likewise, advisors find that the data entry process is manually slow, highly repetitive, disconnected, and siloed within firms.

Those are challenges that remain mostly the same whether firms use paper forms or have adopted their digital counterpart. They arise from the fact that there was no direct digital pathway to financial information.

Data connectivity makes it more efficient and convenient for advisors to collect the information that they need to open accounts and transfer assets. Connections to retail banking accounts return personal identifiable information, while connections to their investment accounts provide full visibility on their assets. This comprehensive and accurate information can then be used to verify a new client’s identity, and automatically populate transfer authorization forms.

Most importantly, it frees up time that was typically spent manually filling out forms and allows advisors to focus on their client relationships. Onboarding new clients is, after all, the first and potentially most lasting experience with a wealth firm.

Improving what advisors already have

When new digital tools loom around the corner, a common concern for anyone, anywhere, is that the workflows they’ve come to master will be disrupted. So how does financial data connectivity fit into advisors’ day-to-day operations?

The short answer is that data connectivity helps power existing systems.

While no two firms are the same, many advisors already use customer relationship management (CRM) systems to deal with data intake and access to portfolio management dashboards. Once an account is connected, data is automatically retrieved and can be linked to the CRM.

Firms that use a third-party portfolio management system or CRM are likely to see data connectivity as an optional feature to be used instead of, or alongside, digital forms. The information collected from the clients’ accounts will be fed directly into the firm’s system.

Additionally, firms and institutions that have built their own systems can use improved data connectivity to onboard clients and run analytics to power their dashboards – all of which help enhance the client experience.

In its report on open banking, the Senate states that 3.5 to 4 million Canadians are already accessing a financial app or service using data connectivity. This number represents over 15% of the country’s adult population, and adoption is on the rise.

Wealth firms can count on them to seek out the same level of control and convenience when they open an account with them. 2021 is finally the year they can make this happen.