Royal Bank of Scotland (RBS), one of the UK’s ‘big four’ banks is launching ‘Esme’, a digital site under its NatWest brand that will offer business loans within hours to small and medium-sized enterprises (SMEs).
The Financial Times reports that the new service will be available around the clock and the bank will offer up to £150,000 ($187,000/€177,000) for all small businesses, including those who are not RBS customers. Loans will be for up to a maximum period of five years.
Esme, developed by RBS’s in-house innovation lab, will process each step of the loan application, including credit scoring and compliance with know-your-customer (KYC) and anti-money laundering (AML) requirements.
The move by the state-owned bank comes less than two years after RBS announced the closure of global cash management division as part of a major restructure to focus on the UK market. Many of its non-UK business customers transferred to BNP Paribas and Citi.
Alison Rose, chief executive officer (CEO) of RBS’s corporate, commercial and private banking business said the launch of such a digital service was in response to the rise of similar peer-to-peer (P2P) and other direct lending sites in the UK.
“The last thing SMEs want is to spend hours filling in paper work, so this allows them to quickly complete a digital process. [SME lending] is a really big part of our engine of growth,” she told the FT.
Rose added that despite the bank’s digitisation move, RBS will continue to give importance to its managers whose role is to support these SME businesses. “We know a relationship banker is so important if a company does get into distress. The relationship banker stays with them the whole way through,” she said.
RBS has agreed deals with several P2P sites in the past two years as a way to refer some smaller businesses that it is unable to finance. The bank formed a partnership with a group of sites including Funding Circle to provide options for customers with loan applications that do not meet its criteria.
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