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Succession management - Empathy and excellent service are imperative

Regrettably almost all of us have to deal at one point in time with the passing away of a loved one and the associated financial administration to handle the succession.
Obviously this is an emotional activity, where a personalized, empathetic and frictionless service from the bank are essential. When a customer is grieving, the last thing he wants is to deal with an inefficient and bureaucratic process at the bank of the deceased person.

Unfortunately at many banks succession management is still a very manual and difficult process, despite the fact that certain banks have to deal with hundreds of cases every week.
Furthermore communications and marketing campaigns rarely take immediately such announcements into account, resulting in painful messages sent to the heirs of the deceased person.

The reason for this lack of efficient and personalized processing is obviously the fact that succession management is a very transversal process in a bank, impacting all banking product silos. As such data needs to be collected and updated in almost every system of the bank, which requires a very intensive integration, for which in most banks there has never been a high priority.

The result is that succession management is a very resource intensive work, which is often slow and prone to errors. Digitalization can certainly offer an answer to this. With the great wealth migration upcoming (cfr. my blog "https://bankloch.blogspot.com/2020/06/a-demographic-shift-changing-financial.html"), it will be essential for banks to rapidly invest in this domain. Not only will an automation allow to reduce the operational cost, but it also provides a better customer centricity, and, let’s be blunt, it also provide an opportunity to build out or deepen the (commercial) relation with the heirs of the deceased person.

Such a digital succession management tool should manage the full end-to-end flow from the announcing of the decease all the way to the pay-out of the inheritance to the heirs.

This means the tool should provide a user-friendly and intuitive portal towards the customer and a back-end integrating with all bank systems to correctly orchestrate all data retrievals and data updates.

In practice this means the front-end should expose following functionalities:

  • Announcing a deceased person: this will be done by one of the heirs, who might not be customer of the bank. As such this portal should also be accessible to non-customers of the bank, while still providing sufficient security via a standard identity management system (like the eID or Itsme in Belgium)

  • Allow to provide necessary information of the decease (e.g. the identification of the deceased person and the indication who will be executor of the will), including the upload of necessary documents, e.g. the death certificate.

  • Allow to follow-up the succession process, i.e. which steps have been done and what are the next steps, with an indication if any actions are required by the customer and an estimation of expected remaining time if action is at the bank, notary or government side.

  • Provide support to fill in a declaration for the government, such as automatic (pre-filled) templates or an overview of all steps to be done, with links to the right websites.

  • Provide a means to debit larger amounts of money from the blocked accounts of the deceased person, for paying a cost linked to the deceased person (e.g. a funeral cost). The customer should be able to input and sign the payment and immediately upload the necessary proof documents to justify the payment (e.g. invoice of the funerary). The bank can then validate the proof documents and liberate the payment.

  • An easy retrieval of all assets, liabilities and transactions of the deceased person at the bank, with possibility to immediately generate and download the official statements sent to the notary and government.

  • A simulator for a calculation of the estimated succession taxes.

  • Supporting material to help the customer in corectly dealing with the decease and succession, such as a FAQ with answer on typical legal and fiscal questions or a checklist (with some explanation and links) of all actions to be done to correctly manage the decease, such as informing companies like banks, insurers, utility companies, stopping all running subscriptions, informing the government, requesting a survivor' pension, recuperating access to social media accounts, selling home and/or household…​

But banks could go one step further and provide access to this portal also before a decease. This would allow a customer to publish his testament, choices for funeral (e.g. organ donation, type of funeral…​) and potentially important information (like passwords, locations, accounts at different banks…​). This info would only be accessible by the customer himself, until an heir announced a decease, with official certification, after which this info would become automatically available to the heir. This provides a much more digital vault, which can only be opened by you as long as you live, but can automatically be opened by your heirs upon your decease.

In the back-end following steps (via multiple integration points with back-end systems) should be ideally orchestrated:

  • Update customer management system

  • Send notification to branch employees so that they are aware

  • Update different systems (e.g. portfolio management system) with info of decease

  • Ensure that no communication is sent out anymore to the person (e.g. remove from any mailing lists)

  • Block all accounts

  • Automatically create mandate to view accounts & debit money (for a legally defined maximum) for the person managing the succession

  • Give instructions to life insurance platforms for pay-out

  • Stop all debit instructions & any other standing instructions (like e.g. investment plans)

  • Automatically generate condolence letter

  • Automatically collect valuation of all assets and generate report for notary

  • Identify any large transactions within last 3 years before decease

  • When succession has been approved by state:

    • Transfer money

    • Close accounts

Of course this is a sensible topic. It’s hard for a bank to come out with a big marketing campaign that they have completely automated and improved the user experience of the succession management process.
But this shouldn’t take away the fact that customers will remember the longest those persons and institutions, which helped him in times of most distress. As such the interaction with your bank related to a decease should also be as frictionless and transparent as possible.

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