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Businesses are more likely to join a fully digital bank

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Most businesses would prefer to have an innovative bank that can go through all of the relevant regulatory checks digitally, a new report has found.

Data from Encompass, which polled 200 senior business decision-makers in enterprises and SMBs in the UK, found 57 percent of businesses are still using a bank that requires paper-based documentation in order to pass onboarding and compliance processes.

These processes seem to be slow and cumbersome. For more than a third (37 percent) it’s unfit for purpose, and almost half (44 percent) are saying the process of opening a business bank account isn’t what they expect it to be.

The good news is, the majority of banks (56 percent) are improving other aspects of their digital services, signaling the right direction they’re taking. These services include online consultations and transactions.

Covid-19 seems to have played a major part in uncovering the “digital divide” between banks. The majority of senior decision-makers polled for the report said social distancing measures “exposed the digital divide” between traditional banks and specialist financial service providers that offer more of a digital service.

“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,” commented Wayne Johnson, CEO and co-founder, Encompass Corporation.

“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.”