Before COVID-19 lenders took on average 90 days to deploy capital to SMEs. Furthermore, 57% of all SME credit applications are abandoned because they are too difficult to complete or are ultimately rejected (source).
The Government has been quick to provide support to SME’s, with a series of timely and comprehensive measures designed to provide financial relief to UK businesses.
However, banks and lenders have faced heavy criticism for the slow delivery of the coronavirus business interruption loan scheme due to the arduous application. In April only one in five UK businesses who formally applied for government-backed loans were granted emergency funding, raising concerns that the programme.
The recent bounce-back loans have been designed to combat this to allow small firms to access cash more quickly and easily with a much simpler application process.
With increased media scrutiny on the economy, lenders must ensure they take every available action to maintain their reputation and deliver a positive customer experience to SMEs with quick verification and approval of funding applications.
Effective identity verification
Effective identity verification, onboarding and validation will be at the heart of ensuring that business owners can quickly access the loans they need to survive. It will also ensure lenders can satisfy regulatory requirements remotely, and stop fraudsters from capitalizing as lenders try to quickly approve legitimate loans. The NorthRow RemoteVerify solution addresses all of these issues and can be deployed in a matter of days ensuring the lender delivers great customer experience.
Remote verification is not just quicker and more convenient, it has also been shown to be more reliable and definitive when determining the accuracy and veracity of identification documentation.
Remote onboarding and verification
What has become apparent is that SME Lenders that rely on face-to-face meetings to verify their client’s identity before allowing them to use a product or service is a massive barrier to onboarding.
In these unusual times, asking your clients to come into an office or branch is no longer viable. Not only do today’s clients desire the convenience of signing up to a product or service in minutes from a mobile phone, but with ‘social distancing’ imperatives, it has become key that regulated firms need to respond to this increasingly preferred and socially-acceptable demand for remote onboarding.
Download our latest opinion piece on the new normal of remote verification.
FinTech Task Force
In answer to the current pandemic, and in addition to the NorthRow remote onboarding solution, we have joined a FinTech Task Force with Trade Ledger, Wiserfunding and Nimbla to provide a new turn-key loan origination and underwriting platform to allow banks and lenders to provide funds to businesses on a much easier scale than previous. The platform will enable loans to be deployed within days rather than weeks.
This platform includes risk assessment, ‘know your customer’ (KYC), and insurance capabilities, and can be used by individual lenders or as part of a consortium. The funds that are made available are deployed virtually and digitally and aim to lessen the impact of the COVID-19 outbreak on SMEs.
In Summary
By leveraging digital onboarding technology, traditional banks and lenders can work to enhance their digital offering whilst ensuring anti-money laundering regulatory compliance.
At NorthRow we offer remote client onboarding solutions that can verify corporate entity and individual data via a single point solution, increasing efficiency, improving the customer experience whilst helping to deliver regulatory compliance. Our digital onboarding solutions can be seamlessly integrated into existing infrastructure to maximize efficiency with various options available – including the PAYG Lite version.
Regardless of the presence of COVID-19 and social distancing, digital customer onboarding in banks and other enterprises will be instrumental for eventual growth and expansion.
Original Article included in Finextra on 20th May 2020: How FinTechs are transforming SME lending.
