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Encompass reveals that 38% of UK businesses abandon banking services app owing to slow due diligence

Wayne Johnson, CEO and co-founder, Encompass

Recent research from the KYC and RegTech specialist, Encompass Corporation, has revealed that 38% of the UK businesses have deliberately stopped using banking services applications owing to “slow due diligence process”.

The research was conducted with a sample of 200 business decision-makers in large and medium-sized businesses. The study attempted to understand the challenges faced by the companies in accessing financial support as well as their attitudes towards cybersecurity and regulation.

The study also found that 44 % of them prioritise spending on cybersecurity over anti-financial crime compliance in 2020 while 81% of the organisations claimed that they are well versed in their understanding of exposure to financial crime and are already in the process of addressing it.

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

Encompass also found that 44% of the companies did not put their customers and suppliers through the formal Know Your Customer processes. 60% of the organisations claimed that no training for staff regarding compliance with the Fifth Money Laundering Directive (5MLD). One-third of the businesses, 29%, stated that they trust challenger brands and FinTech providers more than traditional banks.

“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,” Johnson concluded.

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