Is traditional banking at risk? 85% of organisations are looking to digital-first alternatives over clunky KYC processes

New research reveals four-in-five corporate treasurers are dissatisfied with their bank’s KYC experience

23^rd April, London, UK: Corporate banks are grappling with a major client growth and retention challenge, a new survey from Encompass Corporation, a leader in Know Your Customer (KYC) automation and corporate digital identity, reveals. Frustrated by friction in traditional banking transactions, 85% of organisations are actively considering a move to digital-first banks in search of a more seamless onboarding experience.

Of significant concern is the finding that almost 9-in-10 (86%) of organisations reported losses as a direct result of lengthy or complex onboarding journeys. Unsurprisingly, 84% of the 250 corporate treasurers who responded to Encompass Corporation’s global survey expressed frustration with their existing KYC experience.

Legacy systems and fragmented workflows are costing institutions more than operational efficiency —they are costing client trust, revenue, and long-term growth. We are on the cusp of significant industry-wide transformation, and the institutions that will lead this next era of banking are those that embrace corporate digital identity to deliver compliance with speed, accuracy, and transparency, said Wayne Johnson, CEO and Co-founder of Encompass Corporation.

This change is essential as clients grow more impatient. Encompass research shows 83% of organisations have considered switching banks in the past year due to manual processes and repetitive compliance demands. With 92% of organisations repeatedly being asked for the same information, a clear indication of fragmented systems and inefficient data management.

As cyber threats continue to rise, data security is also increasingly under scrutiny, and 83% of corporate treasurers expressed unease about the way their data is being according to the research. Despite this concern, only 52% of organisations are currently using secure online portals to exchange sensitive information with their banks, the rest leave themselves at significant risk of breaches occurring by relying on emails and other methods. These findings reveal an urgent need for a new approach to data sharing that prioritises client experience, data security and operational efficiency.

With regulatory complexity increasing and client expectations rising, this research serves as a wake-up call for banks to act decisively as delaying transformation is no longer an option, adds Wayne.

View our infographic for more insights on the survey findings.