Across the financial services industry, issues with paper applications accounted for 60% of firms’ total "not in good order" error rates. NIGOs rank among the most common, costly and annoying issues that wealth management, insurance and other financial services firms must address on a daily basis.
NIGOs keep back-office staff — and compliance departments — up at night. Even the smallest mistake on a form forces firms to find and fix the problem and then reprocess the request. At the very least, this costs money, and these dollar amounts can add up quickly. At the worst, NIGOs expose firms to regulatory actions and serious reputational damage.
Technology exists to help firms quickly and efficiently mitigate the submission of NIGO documents. While reducing NIGO errors improves client service, these solutions are often overlooked because advisers and firm leadership don't believe the end clients will see these tools in action. This is short-sighted and detrimental to growth.
Utilizing smart automation tools decreases NIGOs significantly, drives efficiencies and improves the customer experience.
The best way to reduce NIGO documents is to eliminate physical documents. Going digital and removing the paper trail will change the game. Recent research from the Harvard Business Review reports a 65% reduction in costs and 90% reduction in turnaround times for firms with strong digital processes.
It’s far easier to misplace hard copies or have missing pages when documents aren’t stored on a digital cloud or software platform. Moving toward an online storage solution can help cut down on the risk of losing documents and also provides a more secure experience for customers.
Similarly, transitioning to electronic signatures instead of manual ones can help expedite processing and make sure that customers are signing in all the right places. Many digital e-signature applications don’t allow users to submit documentation until all required fields have been filled in. Using electronic signatures also allows customers to easily store and print their documents electronically.
Ultimately, the adoption and implementation of digital solutions can help eliminate or reduce errors by automatically populating documents, correcting typos and performing security verification checks.
Perhaps most importantly, digital solutions around the proper handling of documentation can increase trust between advisers and clients. This goal more than anything else can help firms cultivate long-standing professional relationships with customers that result in better investment advice (and increased profitability) for the long term.
Dealing with NIGO documents may feel like a “wild goose chase” of hunting for information from investors and customers: tedious, time-consuming and expensive.
The administrative costs of reprocessing go well beyond the immediate financial implications. Instead of focusing on ways to support the client-adviser relationship, a good chunk of an administrative staff member’s time must be spent reprocessing NIGO documents. Not only is this work redundant, it can also potentially lead to further inaccuracies as employees are increasingly unable to pay attention to other important logistical details of their jobs.
There’s no doubt that NIGO documents cost significantly more than those submitted correctly in the first place — the lost fees and wasted employee time drag on the bottom line. Key punch errors, typos and putting information in the wrong form fields can create significant backlogs and result in incorrect recommendations, which ultimately risks the trust between investors and clients. This negative experience can cost a firm otherwise loyal clientele and result in high investor abandonment rates.
Finding innovative tech solutions can help firms mitigate future NIGO impacts by avoiding them altogether.
Richard Thoeny is vice president of product management at Docupace, which provides cloud-based fintech digital operations software for the wealth management industry.
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