Nearly three-quarters of businesses are more likely to join a bank with a fully digital onboarding process

Almost three-quarters (73%) of businesses are more likely to select a bank that could perform all relevant regulatory checks digitally, according to official research from Encompass.

The data, which was obtained via a survey of 200 senior business decision-makers in large- and medium-sized UK companies conducted by independent polling company Censuswide, also found that 57% of businesses are still with a provider that requires some paper-based documentation for onboarding and compliance checks.

Since the start of the COVID-19 pandemic, paper-based communication and documentation has become increasingly obsolete in a society-wide effort to reduce contact and streamline services, however, some banks have fallen behind. Almost two-thirds of business decision makers (64%), for example, agreed that the implementation of social distancing measures has exposed the digital divide between traditional banks and specialist financial services that provide a truly digital service.

Furthermore, more than one-third (37%) admitted that their current banking provider’s onboarding process is too slow and not fit for purpose, while 44% said that the process of opening a business bank account is no longer in line with their expectations. 58% also agreed that ‘innovation’ is a key differentiator when choosing a banking partner.

Interestingly, though, more than half of business decision makers (56%) did say their bank has noticeably improved other aspects of its digital services since the start of the outbreak. Services mentioned include online consultations and transactions.

Wayne Johnson, CEO and co-founder of Encompass, comments:

The COVID-19 pandemic has permanently altered the way that businesses interact with their banking and financial services providers, increasing the need for online services and resulting in expectations of a much faster approach to onboarding and compliance checks. Sticking with slow, paper-based processes for critical tasks such as Know Your Customer (KYC) checks will, in many cases, no longer be tolerated, especially with customers clearly expecting the highest standards of digital services from their provider.

 

The time has come for banks to fully embrace automated, smart decision-making, enabling seamless compliance with changing regulation, which will reduce costs and improve customer service for the long-term.

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Comment by Tich on September 15, 2020 at 12:08am

An interesting article, thank you Cheri. Some of my immediate thoughts...

Do Banks really have the incentives to change their behaviour given the significant sway they hold over entire trade & exchange spectrum? Their agency relationship with Government has perhaps become too familiar. The too big to fail notion has never been adequately addressed. 

The Problem with technology interventions is that they do not challenge the real issue with banking - the banking industry is shrouded in secrecy to this date. Today Big Data has become the veil further adding to existing complexity. However, I remain confident there are lots of good bankers out there. It is perhaps at the gates of influence, whereever they may lie, that the bottlenecks remain. 

It is true COVID has exposed a number of weaknesses that have remained hidden for sometime. It is has been a breath of fresh air to hear a leader of the stature of Donald Trump pledge to address the structural nature of the problems. However, only time will judge his words, whether they stand or fall to the ground. 

After the 2008-9 financial meltdown, we saw the Obama administration also show interest in addressing the underlying and real issues until politics hijacked the cause and blinded sided the tremendous efforts of the civil campaign groups especially around the Florida area led by Lisa Epstein and friends

Let us as a community hold to our convictions in restoring assurance services as one of the pillars towards a just, secure and prosperous global society. 

My interest is lies Global Debt and its negative impact on the global economy. If anyone out there would like to collaborate. I have done quite an extensive amount of research around this pandemic. 

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