The COVID-19 pandemic is having a devastating impact on businesses and the economy in the UK.
Access to finance for business, as provided by banks and financial services institutions, is imperative in these trying times. Whether you’re a shopkeeper, sole trader or multi-national company, the chances are you need help right now, and getting access to financial support is a top priority.
Money is a difficult topic during a time of global pandemic but the fintech industry could prove its worth during the current challenges.
Optimistically, when we come out of this, the digital and tech world, and the services that it has to offer, is going to become more important than ever before. Already, it is becoming clear that remote banking is proving to be an essential tool as the current global situation makes it impossible to visit branches physically, which is particularly worrying for the more vulnerable members of society.
As a result of the COVID-19 pandemic, it is no surprise that fintech applications and services have seen a surge in adoption in the UK in recent weeks, with a large number of people having to adapt their lifestyles to cope with limitations on accessibility and mobility, particularly to their finances.
As citizens have been told to stay at home, digital banking apps are increasingly being used, along with other digital services, which has provided a much-needed service and support system. The fast increase in the use of financial technology comes just as the whole world is driven to re-adjust to life struggling to fight the global health crisis and economic decline which has been caused by the Coronavirus.
The current uncertainties reinforce the importance of finance providers and their vital role in supporting the economy.
Unfortunately, many providers or financial institutions do not have the IT infrastructure to manage the huge influx of consumers increasing their usage of digital banking services, and businesses are therefore facing longer waiting times for applications to be approved or credit to be verified.
At a time when instant access to finance could mean the difference between paying invoices on time or signing off a deal, the disruption to the financial sector could mean the difference between going bust, or staying afloat, as thousands of business attempt to weather the remaining months or years of the COVID-19 crisis.
In fact, the latest Encompass research revealed that 38% of UK businesses have deliberately abandoned an application for banking services in the last year due to ‘slow due diligence processes’. Therefore, it’s time that more banks and financial services organisations harnessed the power of analytics and automated solutions to securely adhere to important compliance processes at a much faster pace. Doing so will unblock the logjam and get companies the access to necessary financial support during this challenging time, and without delay.
For small businesses, there will be even more challenges to face in the coming months, and now is the time to utilise the cutting-edge technology to facilitate regulation processes, or laborious admin work – freeing up employees to focus on more pressing issues.
However, as previously mentioned, providing customers with completely uninterrupted access to services is a challenge right now because systems are still vulnerable to performance issues or data breaches, which has no doubt effected customer confidence. This only further stresses the need for businesses to improve internal operations, update IT infrastructure and implement the necessary regtech technology to assist administrative tasks and onboarding protocols wherever possible.
In the financial sector, it is crucial that banks communicate effectively with customers about any possible disruptions in the near future, in order to help business owners and individuals manage their personal or professional finances with any delays or time limitations in mind. This could include opting for in-app services designed to alert people about any changes to their account and ensuring that they engage with customers on social media.
Although the sector will be under increased pressure this year, and may face many challenges as the situation changes and develops, there is potential for benefits to come out of this and the way people use fintech may never be the same again. Of course, we will have to wait and see if the shift to digital finance habits will endure but it is likely that fintech and banking apps will only gain traction and become a long-term shift.
COVID-19 has also led to a dramatic increase in crime, with many opportunistic criminals using its guise to trick unknowing consumers into sophisticated cyber scams which have been designed to look like legitimate government schemes or financial aid services. What’s more, the increased pressure on banking services means the fight against money-laundering in the UK has been neglected, to an extent.
Therefore, financial services institutions must ensure they have trustworthy and secure onboarding software to quickly do background checks and ensure customers are legitimate, in order to speed up banking due diligence. More banks should make use of automated Know Your Customer (KYC) solution technologies to ensure swift approval and compliance, making it the processes easier and quicker. In addition, more companies should now focus on the onboarding process as a first line of defence against sleeper fraud, by making sure that fewer fake accounts get created to begin with.
The Coronavirus outbreak has affected every industry, however giving up to this pandemic will lead to irreparable loss. Using advanced technologies such as KYC identity verification software is a feasible solution for this. It avoids human interaction with machines in public spaces whilst maintaining a banking-grade security in customer due diligence measures during these times of uncertainty.
Encompass’ intelligent process automation conducts live document and data collection, analysis and integration from public and premium sources to bring transparency to complex corporate structures and ultimate beneficial ownership, delivering the most accurate and complete KYC on demand.