38% of UK businesses have deliberately abandoned an application for banking services in the last year due to ‘slow due diligence processes’, according to new research from Encompass.
The survey, which polled 200 business decision-makers in large and medium sized businesses, was conducted between Wednesday 18 March and Thursday 19 of March 2020, just after the Chancellor announced a £330bn rescue package due to support UK companies through the COVID-19 crisis.
The research asked businesses about the challenges they face in getting access to financial support, as well as attitudes towards cybersecurity and regulation.
In addition, the polling found that businesses plan to prioritise spending on cybersecurity over anti-financial crime compliance in 2020, with 44% putting plans in place. However, a large 81% of organisations agree that they are confident in their understanding of exposure to financial crime and that they already have the processes in place to address it.
According to the polling results, 44% of companies said they did not regularly put customers and suppliers through formal KYC processes. Additionally, 60% admitted that there has been no training for staff about how to be compliant with the Fifth Money Laundering Directive (5MLD).
Meanwhile, nearly one third of businesses (29%) said they now trust challenger brands and fintech providers more than traditional banks. Wayne Johnson, CEO and co-founder, Encompass comments:
It is disappointing that complex, expensive and overly-long due diligence processes are preventing British businesses from getting access to the finance and banking services they urgently need.
Everyone recognises that it’s vital to ensure correct background checks on new customers to prevent money laundering and criminal activity, but these checks should not act as a hindrance to legitimate companies gaining access to the credit and services they require.
It’s also worrying that so many companies admit to minimal KYC onboarding processes, as well as offering zero training on important directives such as 5MLD.
It’s time that banks and financial services organisations harnessed the power of analytics and automated solutions to swiftly and securely adhere to these important compliance processes. Doing so will unblock the logjam and get companies the access to necessary financial support during this challenging time, and without delay.