Most organisations eye digital banks as KYC frustrations grow

Research from Encompass Corporation suggests that the majority of organisations are increasingly dissatisfied with traditional banks' KYC procedures, with 85% considering digital-first banking alternatives.

According to Encompass Corporation's latest corporate survey, 86% of organisations reported financial losses attributed to slow or complex Know Your Customer (KYC) onboarding journeys.

The survey revealed that 84% of the 250 corporate treasurers questioned expressed frustration with their current banks' KYC processes, indicating widespread dissatisfaction with the industry's approach to compliance and client onboarding.

Wayne Johnson, Chief Executive Officer and Co-Founder of Encompass Corporation, commented: "Legacy systems and fragmented workflows are costing institutions more than operational inefficiency—they are costing client trust, revenue, and long-term growth. We are on the cusp of significant industry-wide transformation, and the institutions that will lead this next era of banking are those that embrace corporate digital identity to deliver compliance with speed, accuracy, and transparency."

The report also found that 83% of organisations have considered switching banks within the past year, citing manual processes and repeated demands for compliance information as primary reasons for their dissatisfaction. A further 92% of respondents indicated that they were repeatedly asked to provide the same information during the onboarding process, pointing to issues with fragmented systems and inefficient data management practices.

Data security emerged as a related area of concern, with 83% of corporate treasurers stating they were uneasy about how their data is handled by banks. Despite these worries, only 52% of organisations reported using secure online portals to share sensitive information with their banking providers, while the remainder continue to rely on email and other less secure methods, exposing themselves to a greater risk of cyber breaches.

Encompass Corporation's findings suggest there is an urgent need for banks to modernise their data sharing and onboarding processes. Client patience is described as running thin, with inefficient procedures leading to tangible revenue losses and increasing the risk of client disengagement.

As banks contend with escalating regulatory complexity alongside rising client expectations, the report advocates for decisive action to transform compliance and client onboarding strategies. Wayne Johnson added: "With regulatory complexity increasing and client expectations rising, this research serves as a wake-up call for banks to act decisively as delaying transformation is no longer an option."

The Encompass Corporation study highlights a significant industry shift as corporate clients increasingly favour digital-first banks that offer more streamlined and secure onboarding experiences.