Harness Open Banking to navigate downturn, SMEs told

Ella Farmer,
24 Oct 2022

Companies integrated into the Open Banking ecosystem should harness the macroeconomic uncertainty to drive adoption among small and medium-sized enterprises (SMEs).

Financial experts at the Open Banking Expo in London on Thursday (20 October) explained that SMEs will need solutions for borrowing, cashflow management, invoicing and productivity in the months ahead as unprecedented economic uncertainty hits the UK economy.

Tom Beckenham, founder of Comma, said the economic concerns are “the only thing” that SMEs can focus on at the current time, “never mind to grow, plan, or get any further”.

Beckenham, a seasoned director, said the industry has an opportunity to support small businesses and facilitate Open Finance adoption at the same time.

“If we look at what we can do in this industry, it’s really about trying to let businesses have clarity,” he told delegates. “That means it is essential to give rapid and immediate access to information around their financial position.”

The challenging operating environment may also act as a catalyst for the adoption of solutions across Open Finance, delegates heard.

Constanza Castro Feijoo, stakeholder engagement specialist at the Open Banking Implementation Entity (OBIE), said that Open Banking had delivered on its past promises to SMEs to enhance productivity, but could still go further.

“I feel we are on the journey of delivering,” she said. “With Open Banking, we’re five years in, after starting in 2018 when the CMA [Competition and Markets Authority] mandated the implementation of Open Banking. It had a very clear aim to improve customer choice and drive innovation, and drive competition.”

Despite the positivity in the room, presenters acknowledged that there is still a huge opportunity to improve the way that SMEs transact using basic financial functions. Panellists noted that 46% of UK salaries continue to be paid manually, as one example.

Jamie Leach, a digital identity specialist who is working with the United Nations and the World Bank, asked panellists what more the industry could do to stimulate SME adoption of new products and services.

Simon Cureton, chief executive officer of Funding Options, said ultimately, it all came down to collaboration and the willingness of stakeholders to work together.

“For me it needs to be coordinated and we need to see more collaboration across the entire ecosystem,” he said. “Everybody is doing their own thing to a large extent which means the experience of one provider is very different to another.”

Fellow panellist, Michael Green, director of partnerships at Xero, agreed, calling for the standardisation of APIs. Without this, he claimed, the user experience would always disappoint.