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===Design thinking=== | ===Design thinking=== | ||
For all the millions that firms spend on rearchitecting their onboarding systems — the philosopher-kings of [[operations]] who have transcended | For all the millions that firms spend on rearchitecting their onboarding systems — the philosopher-kings of [[operations]] who have transcended the [[service line]] will wheel out a strategic remediation initiative, every 18 months or so, but somehow nothing ever changes — a few foundational questions seem resistant to even being asked. Such as: | ||
====What is the ''point'' of onboarding'''?==== | ====What is the ''point'' of onboarding'''?==== | ||
It not only resembles a production line but ''is'' one. You are manufacturing a product for delivery to your client. But your revenue profile is different: you don’t make your money upfront, but only once the client has its product. You are selling a ''relationship'', not a ''chattel''. This means: | It not only resembles a production line but ''is'' one. You are manufacturing a product for delivery to your client. But your revenue profile is different: you don’t make your money upfront, but only once the client has its product. You are selling a ''relationship'', not a ''chattel''. This means: | ||
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But, but, but — why must it be that our onboarding process does nothing ''but'' obsess about disaster scenarios? We know of cases where even affiliated broker-dealers — entities under common control in the same financial services group — have laboured for ''years'' to conclude a simple [[Global Master Securities Lending Agreement|stock lending agreement]], horns locked over the [[indemnities]] each required of the other, neither side advertent to the fact that the risks between them would be reported at a consolidated group level anyway. | But, but, but — why must it be that our onboarding process does nothing ''but'' obsess about disaster scenarios? We know of cases where even affiliated broker-dealers — entities under common control in the same financial services group — have laboured for ''years'' to conclude a simple [[Global Master Securities Lending Agreement|stock lending agreement]], horns locked over the [[indemnities]] each required of the other, neither side advertent to the fact that the risks between them would be reported at a consolidated group level anyway. | ||
And when it comes to actual clients, every element of the onboarding process is arrayed ''against'' the client as if, until proven otherwise, each should be taken as a dissolute money-laundering gambler and fraud who will stop at nothing to subvert your legitimate interests in making a fair return out of your relationship. Now, look: the [[JC]] is | And when it comes to actual clients, every element of the onboarding process is arrayed ''against'' the client as if, until proven otherwise, each should be taken as a dissolute money-laundering gambler and fraud who will stop at nothing to subvert your legitimate interests in making a fair return out of your relationship. Now, look: the [[JC]] is not naïve enough to believe there are no institutions like that in the ecosystem. There certainly are. Most of them, in fact: we assume a broadly Hobbesian view of human nature in the wild, and wish others would too. | ||
And are [[salespeople]] wilfully blind to the risks of intercourse? As a randy goat. A whiff of a sales credit can suspend the most foundational disbeliefs in a heartbeat. But that is not the point. The point is that, even against such bounders and cads, a mute legal document — especially one you hammered out nineteen years ago and haven’t looked at since — ''is no kind of protection''. [[Don’t take a piece of paper to a knife-fight]], that is to say. ''Take a knife''. Your practical risk is best managed by, well, ''actual risk management''. | |||
This is what half of your employees — the control function — are engaged to do, after all. ''Let them''. Intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by sleep-walking into it and then looking to an arsenal of weapons you prepared a decade ago to wax your client. Think Chernobyl: by the time the core explodes, ''it’s too late''. | This is what half of your employees — the control function — are engaged to do, after all. ''Let them''. Intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by sleep-walking into it and then looking to an arsenal of weapons you prepared a decade ago to wax your client. Think Chernobyl: by the time the core explodes, ''it’s too late''. | ||