onboarding business banking customers

KYC costs will soar by 20% as new regulations such as AMLD5 add complexity to onboarding business banking customers.

Moreover, the average time to onboard business banking customers is now 32 days according to a report from Consult Hyperion.

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The report, ‘Five challenges of business onboarding and customer due diligence’ is produced in collaboration with ID verification provider HooYu.

The report examines factors driving up costs and reducing speed and is based on insight from leading fintechs and banks.

In particular, challenges that financial services businesses are facing include:

  • The onboarding process needs to fit businesses of very different sizes;
  • The ability to quickly and accurately identify and verify who is behind a business;
  • The limitations of third-party database checks;
  • The requirement for additional documentation, and
  • The hidden costs of ongoing due-diligence.

David Pope, marketing director at HooYu comments: “The processes employed by most financial firms to onboard business clients are time-consuming and complex.  They often involve manual steps and protracted back and forth with the prospective customer.

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“While larger businesses may have time and resources to dedicate to these processes, for SMEs it is much more problematic.

Onboarding business banking customers: roadblocks

“In the UK there are 5.7 million SMEs, over 99% of all businesses. So it is a huge problem if there are roadblocks in these businesses account opening journeys.”

Steve Pannifer, COO at Consult Hyperion adds: “The rise of fintech has seen a revolution in consumer financial services. A digitised financial services industry is creating great customer experiences by focusing on the customer journey.

 “But the digitisation of services for business users—in particular SMEs—lags behind.  In this revolution, not all financial services firms have yet embraced new models and ways of thinking.”

The report, ‘Five challenges of business onboarding and customer due diligence’ can be downloaded here.