Leading CLM experts Sean Vickers, Global Head of CLM Advisory based in the UK, Caroline O'Sullivan, Head of Ireland, Liliana Girao-Tavares, US Head of Client Lifecycle Management and Bradley Szu-Tu, APAC Head of Client Lifecycle Management bring their unique regional experiences and foresight to navigate the evolving landscape of CLM.
Biggest CLM Trends in 2024
In 2024, several key trends emerged in Client Lifecycle Management. Sean highlighted the integration of advanced technologies such as AI, machine learning, and automation, which transformed client onboarding and lifecycle processes, significantly improving efficiency and operations.
Sean noted that banks focused on enhancing digital channels to provide more personalised, embedded services, driving deeper client engagement and emphasised the importance of regulatory compliance - with organisations striving to stay ahead of evolving requirements and leveraging data-driven insights for better relationship management and advisory services.
From an Irish perspective, Caroline notes how Ireland's financial services sector saw significant trends in CLM, emphasising digital transformation, AI integration, and regulatory compliance. Firms adopted AI-driven solutions to streamline client onboarding and lifecycle management, boosting efficiency and ensuring adherence to regulations. Amid these advancements, data security and privacy remained paramount as firms navigated the balance between innovation and compliance in a swiftly changing regulatory and technological environment.
Liliana pointed out the US has recognised the trend of operational effectiveness, with a clear focus on developing centralised Centers of Excellence to ensure seamless onboarding through efficient technology. She stressed the importance of strengthening controls and KPIs by utilising advanced technologies to define controls accurately and uncover hidden risks.
Meanwhile, Bradley observed that the APAC region faced challenges like margin compression and budget cuts, necessitating agile CLM technology solutions. Despite these constraints, a 2024 report by Braze found that 86% of APAC brands exceeded their revenue goals, indicating a strong focus on efficient resource allocation. The report highlights that 58% of surveyed APAC companies earned top scores for technical maturity, highlighting the region's strength in adopting agile and advanced CLM technologies.
Bradley also noted the increased hiring of Relationship Managers in Singapore due to the influx of private wealth from Hong Kong and Southeast Asia, driven by more prescriptive regulatory requirements on Source of Wealth (SOW) and Source of Funds (SOF) corroboration.
Expected CLM Trends in 2025
Looking towards 2025, Sean outlines that seamless integration between CLM and other enterprise systems will be crucial, achieved through strategic API use. Regulatory adaptation will continue to evolve, particularly in areas like Environmental, Social, and Governance (ESG) and digital assets.
Poor data quality costs organisations at least $12.9 million a year on average, according to Gartner research from 2020. This highlights the industry's reliance on manual solutions like staff augmentation until these issues are resolved. Liliana added that the significant challenge in optimising technology remains reconciling data quality issues, which necessitates a focus on improving data integrity.
Caroline highlights that EY recently predicted a 26% growth in Ireland's Financial Services Sector by 2028, leveraging its position as a gateway to Europe for global financial markets. To capitalise on this opportunity, firms must innovate by streamlining and automating processes to achieve operational efficiencies and focus more on revenue-generating activities while maintaining compliance with evolving regulations. Updates to AML and KYC standards are high on the EU's AML/CTF agenda. In Ireland, the Central Bank of Ireland (CBI) is focusing on increased scrutiny of financial crime compliance, sustainable finance, and digital transformation.
From an APAC perspective, Bradley highlighted the need for flexible technology solutions and pointed out ongoing data quality issues. According to Precisely, 64% of organisations prioritise data quality as their top data integrity challenge, impacting their ability to optimise technology solutions.
Bradley also noted that regulatory demands are increasing, making transaction monitoring a key growth area. The rapid rate of regulatory change challenges risk-based approaches, requiring efficient, cost-effective solutions. Skills in SOW, SOF, Third-Party Risk Management, and Supply Chain Risk Management are in high demand, with 97% of UK employers stating that soft skills, including those related to SOW and SOF, are key to business growth or success.
Advice for Clients Preparing for These Trends
Sean emphasised the need for clients to prioritise digital transformation, particularly by enhancing their digital channels and improving client experiences. Strengthening data management practices, staying informed on evolving regulations, and developing strategic ecosystem partnerships are essential. Investing in the right talent and developing internal capabilities will help organisations leverage new technologies and adapt to changing market dynamics.
Deloitte’s report states the importance of digital transformation in enhancing client lifecycle management. They highlighted trends such as the integration of AI and machine learning to personalise client interactions and improve retention rates. Additionally, there's a focus on data analytics to predict client needs and behaviours, which helps in tailoring services more effectively.
Bradley outlined the need for up-to-date training and case studies to keep pace with regulatory changes. Strong links between Head Office, Front Office, Compliance, and the Business are crucial for effective MI, data, and governance. As regulatory expectations broaden, robust screening skillsets are increasingly in demand. Banks must develop a data plan and integrate technology strategically for optimised efficiency. Bradley also suggested that banks focus on upskilling their workforce in key areas like adverse media screening, sanctions screening, watchlists, PEPs screening, ownership information, and shared communication across teams, stored for audit purposes.
Summary
Navigating client lifecycle management in 2024 has provided invaluable insights and set the stage for future trends in 2025. Sean from the UK highlighted the importance of regulatory compliance and the need for robust data governance frameworks whilst Bradley in APAC emphasised the role of technology in enhancing client onboarding processes and the growing demand for seamless digital experiences. Liliana in the US underscored the significance of personalised client interactions and the integration of AI to predict client needs more accurately and Caroline highlighted that firms must innovate to streamline and automate processes, achieving operational efficiencies and focusing more on revenue-generating activities to capitalise on growth opportunities.
Overall, 2024 has underscored the importance of regulatory compliance, technology integration, and personalised client interactions in client lifecycle management. Looking ahead to 2025, leveraging data and AI will be crucial for meeting regulatory demands, enhancing client satisfaction, and improving operational efficiency. By adopting these strategies, financial institutions can stay ahead in the evolving landscape of client lifecycle management.
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