Rob Burlison, Director
of Corporate Affairs at Intuit QuickBooks, discusses the potential Open Banking
has for UK small businesses
Almost two years since the introduction of Open Banking small businesses still aren’t taking advantage of this revolutionary intervention that reshapes information sharing within financial services.
In fact, recent QuickBooks research by Opinium, revealed a startling lack of awareness or knowledge of this banking revolution. Although the majority (69%) of small businesses had heard of the term, almost half (45%) were unable to explain it, or didn’t fully understand what it meant.
Open Banking has developed the API functionality for the UKs biggest 9 banks to ‘open up’ their data via secure application programming interfaces (APIs) to regulated third party providers such as Intuit.
This means you can allow banks and third parties, regulated by the FCA or other EU financial regulators, such as QuickBooks to securely share your financial information, allowing you to choose new financial products and services that can help you get a better deal and make the most of your money.
What
does this mean for small businesses and their customers?
Open Banking enables businesses and consumers alike to embrace a new approach to financial services. Instead of banks being the singular source for all financial matters, a wealth of new services and products will be available from a variety of providers.
Importantly, Open Banking also offers businesses a clearer view of their finances. For example, by viewing bank transactions in tandem with other financial outputs, like invoicing or payroll, businesses can better track their cash flow and avoid unexpected financial shocks.
And with poor cash flow management continuing to be the number one reason for small business failure in the UK, this clearer view of cash flow could not be more important.
Offering a wealth of data, Open Banking also provides new business insights at the click of a button. Whether a transaction trend that highlights a potential new area of growth – or a way to cut costs by using a cheaper supplier – leveraging these insights can give small businesses a competitive edge.
Despite all these benefits, half of small businesses (48%) do not think that Open Banking will have any impact on their business.
It is the responsibility of us as industry leaders to demonstrate to small businesses how truly game-changing Open Banking is.
The
role of cross-industry partnership
Small business owners say additional nudges would influence their adoption of Open Banking, with over half (59%) crying out for more information about what it is and what the impact would be for their business.
This means that industry leaders from across various sectors must collaborate more closely to ensure Open Banking becomes more than just a buzz-word. It must become synonymous with tailored customer propositions that are truly innovative in how they leverage previously unavailable data to the customer’s benefit.
Remember, innovation does not just mean new or a world-wide tech breakthrough. Real innovation is about bringing a change to the market that helps drive long-term success for your customer.
It’s often the small, smart evolutions – that put the customer at the centre of the innovation process – that create customer loyalty and therefore long-term value for tech companies and their products.
The opportunity for Open Banking to help small businesses flourish is truly game-changing, but we’re still just at the beginning.
Small businesses that keep their eyes peeled for upcoming innovations, and embrace them, will see efficiencies that drive time savings and increased productivity. This, combined with access to new insights, will help them focus on what really matters, driving business growth and better work-life balance.
The tech industry must make it a relentless focus to help small businesses achieve just this.
For
the latest information on Open Banking and how QuickBooks is using these
advances in tech capabilities to support and help its customers prosper,
visit: www.quickbooks.co.uk/open-banking.
