Companies are increasingly looking for ways to fund their business, with many turning away from traditional banking services, according to a recent survey from Ernst & Young (EY).
In a survey of more than 2,000 businesses from around the world, 38 per cent were looking to use a non-bank to support the operations of their company. This comes on top of the 53 per cent of respondents that are already using a non-banking financial service.
These figures were much higher in the Asia-Pacific region, where 71 per cent of respondents using an alternative service like debtor finance.
EY's Christopher Harris, Principal of North America Practice Lead for Wholesale Banking, suggested part of the reason was that the non-banking finance sector is better able to meet the needs of customers, compared to traditional banks.
"These new, alternative providers are not faced with legacy IT systems and dated infrastructure and processes," said Mr Harris. "As a result, they can start from scratch and build new systems to meet the needs of today's customer."
Part of the reason companies look for alternative funding options is that traditional banks are often seeing service glitches that impact on the customer experience. Among the respondents to EY's survey, 29 per cent reported a problem with their bank in the last 12 months.
A further 57 per cent of respondents were less than satisfied with the resolution of an error that had impacted on the level of service they received. Again, the Asia-Pacific saw a much higher rate of dissatisfaction with traditional banks. Among developed countries in Asia-Pacific, such as Australia and Japan, 79 per cent were less than satisfied with the service they were receiving.
With non-traditional financing growing in popularity and companies making sure they are getting the best possible level of service, the popularity of alternative business financing is likely to increase in coming months and years.
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