1. Asian Banker Research
Building a sustainable sales process bases on the seamless integration of back and middle office for improved due diligence and customer profiling

2. Agenda Sales architecture and current weaknesses
Client suitability profiling complemented with middle and back office verifications reinforces existing selling processes
Product screening and stress testing and customer due diligence assure customer protection

3. Building sustainable sales capability requires reconfiguration of the selling process at the front, middle and back office
Wealth Management Architecture
Client Services
Risk Management
Back Office
Middle Office
Frontline
Staff &
Products
Client Risk
Profiling
Client
Interaction
Sales Management
Front Liners
Trust& Legal Unit
Business/Product
Controller Unit
Compliance Unit
Lending, Deposits,cards,
remittances/ fund transfer
& Custodial Services
Investment& Insurance
Trading
Trade Services
Accounting& Financial Reporting
Business Continuity Testing
Straight-Through-Processing
Enterprise Resource Planning
New generation of Shared
Services-”Process Utilities
Middle& Back
Office Interfaces
Multitude of failure points within an organisation – but focus on front line
The increasing polarization of the industry into producers and distributors and the use of open product architecture forces the banks into developing superior approaches to client service
GATE KEEPING MECHANISMS
WORKFLOW
* Weak areas in selling process
Source: Asian Banker Research

4. Basic Suitability Data
Robust client suitability profiling complemented with middle and back office verifications will reinforce existing selling processes
Demographics
Financial Situation
Income Allocation
Risk Capital
Investment Experience
Product type
Length of experience
Portfolio
Investment Objective & Risk Profile
Investor Profile
Risk Tolerance
Basic Suitability Data
Additional Best Practice Criteria
Source of funds for investment
Fixed payment schedules (e.g. mortgage, insurance etc)
Financial obligations / Other intended uses of funds
Gearing Strategy / Financed by Credit
Investment style (e.g. frequency, proactiveness )
Level of knowledge (expand to include more qualitative assessors)
Investment interests
Investor profile (expand to include more qualitative assessors)
Risk tolerance (expand to include more qualitative assessors)
Life stage planning & Aspirations Mapping
Specific purpose of investment
We believe that rather then develop exhaustive suitability assessment documents, players can improve screening by improving on the quality of questions that are asked
Seen documents which are very formally phrased and hardly descriptive enough to understand the full thrust of the question.
Often very quantitative in terms of basic demographics
Ambitions of clients in making investments and the true investment behaviour can widely differ
Take investment objective and risk profiling banks could further elaborate along the lines of specific product lines and the number of years
Instead of asking are you experienced and x years of exposure to investment
Instead of asking are you moderately aggressive, aggressive or conservative – players could institute real life exposure questions
Staff is not able to do qualitative profiling interviews
Source: Asian Banker Research

5. Product Development / Sourcing
Building robust sales capabilities must also extend to improving product development and sourcing capabilities
Stakeholders
Top Management
Product Development / Sourcing
Best practices include:
Develop systematic product screening procedures that incorporate client suitability and prevailing/expected market conditions (and not only financial parameters)
Stress-test complex products to understand performance under different market conditions
Include specific risk warnings and disclosures in reader-friendly formats
Marketing
Create consistent and simple propositions for ease of sales staff and customer understanding
Develop marketing messages that reflect expectations and needs of targeted segments
Collaborate with compliance and legal departments in collateral approval process
Sales Staff
Conduct risk assessment for each new product recommended / sold
Highlight risk warnings to customers during product walk-through and before sale
Define an acceptable range of products to develop / source
Assess ability of sales staff to comply with internal rules for defined range of products
The increasing polarization of the industry into producers and distributors and the use of open product architecture forces the banks into developing superior approaches to client service
Develop systematic product screening procedures that incorporate client suitability and prevailing/expected market conditions (and not only financial parameters)
Currently, there is hardly a systematic and consistent way to assess and subsequently rate the risk levels attached to financial products
Due diligence responsibility of the product screening team should not stop once a product has been approved for distribution
In marketing promotional gifts often distract from the key facts and fundamental investment features

6. For further information
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