41% of businesses plan to change their banking provider due to their experiences during the Covid-19 pandemic.
This is according to research commissioned by software provider Encompass Corporation, which revealed that a significant percentage of businesses had experienced poor customer service from their banking provider, prompting them to consider a switch.
The survey of 200 business decision makers from large and medium sized companies showed that 42% have had to wait over two weeks for a business loan application, and 46% have observed “significant delays” in their bank’s onboarding process since the start of lockdown.
Furthermore, 49% have said that they are yet to receive offers of financial support during the Covid-19 crisis, and 40% said that their bank’s digital services during the pandemic have been poor.
With business operations changing drastically during the Covid-19 pandemic, it comes as no surprise that many medium and large businesses currently require different types of support and services from their banking provider. With many dissatisfied with the digital services offered by their current bank, digital-only challenger banks may have solutions.
Challenger banks: An option for businesses looking to switch banking provider?
In April, The British Business Bank approved four new banks, The Co-operative Bank, Cynergy Bank, OakNorth Bank and Starling Bank, to join the list of accredited lenders under the Coronavirus Business Interruption Loan Scheme. Metro Bank was also added last month.
Last week, digital-only challenger bank Starling announced it had raised £40m in its latest funding round, which founder and chief executive Anne Boden has said will go towards its “commitment both to Starling and to our small business and personal customers”.
However, fast-growing challenger banks are not immune to the effects of the pandemic, with research from Finbold showing that challenger bank app downloads were down 23.38% at the end of March compared with the previous month.
“The Covid-19 crisis has had a big impact on all sectors of British industry, especially financial services. In fact, many banks are being forced to run a skeleton crew of remote workers, and a number are still operating outdated legacy IT systems, which are unable to cope with the influx in demand for banking services,” said Wayne Johnson, CEO of Encompass Corporation.
“This move from on-premises to remote working has underlined the value of Software as a Service (SaaS) solutions. Standard, out of the box solutions can be up and running in a matter of days and be easily accessed remotely, via computers or mobile devices, without having to contend with firewall issues – something that has posed a significant challenge to many organisations. These factors could make all the difference when migrating employees to our ‘new normal’ and ensuring they have the data and systems they need to work effectively at their fingertips.
“Moving forward, finance professionals and institutions must continue to implement the necessary regulatory and automation technology in order to ease their workload and speed-up processes for clients and consumers. The right RegTech can improve efficiency and accuracy of administrative tasks, such as KYC checks and onboarding processes, and free-up all-important staff time to ensure all businesses and individuals can get instant and easy access to financial services at a time when they need it most.”