As many as 38 per cent of UK businesses have deliberately abandoned an application for banking services in the past year due to “slow due diligence processes”.
The findings followed a poll of 200 decision makers by the regulatory technology specialist Encompass Corporation,
The survey, which polled 200 decision-makers in large and medium sized businesses, was conducted, just after the Chancellor announced a £330bn rescue package due to support UK companies through the Covid-19 crisis.
Researchers asked businesses about the challenges they face in getting access to financial support, as well as attitudes towards cyber security and regulation.
The polling also found that businesses plan to prioritise spending on cyber security over anti-financial crime compliance in 2020, with 44 per cent putting plans in place.
However, 81 per cent 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.
One third of businesses said they now trust challenger brands and fintech providers more than traditional banks
According to the polling results, 44 per cent of companies said they did not regularly put customers and suppliers through formal Know Your Customer (KYC) processes. And 60 per cent 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 per cent) said they now trust challenger brands and fintech providers more than traditional banks.
Wayne Johnson, CEO and co-founder, said: “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.”