The unprecedented uncertainty caused by the pandemic is having a profound impact on SMEs around the globe. Lenders must ensure they deliver funds quickly and efficiently to help ensure the survival of small businesses. With lockdown measures still in place
for many, the questions is how can lenders continue to deliver faster funding for SMEs during the coronavirus (COVID-19) crisis.
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
FinTech Task Force
In answer to the current pandemic, FinTech leaders from the lending sector formed a
taskforce to support funding for SMEs during this time. FinTech companies such as Trade Ledger, Wiserfunding, NorthRow and Nimbla 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.
By leveraging digital onboarding technology, traditional banks and lenders can work to enhance their digital offering whilst ensuring anti-money laundering regulatory compliance.
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.