Jonny Hawkins

The small business end: driving adoption with education

Jonny Hawkins
03 Apr 2019

It’s no secret that Open Banking is set to notably increase consumer access to financial products, whether that be debt management tools, overdrafts and loans, or modern banking. But how can this new technology benefit businesses, as well as the individual consumer?

Here at Liberis, we believe the most prominent benefit to small businesses is the notable improvements Open Banking can bring to the business finance market. Accessing finance can be a huge challenge for UK small businesses. Especially as the mainstream banking system has so significantly retreated from funding small businesses; with the total amount of bank overdrafts and loans outstanding to small businesses decreasing by nearly £6 billion in the past five years.

Our recent research has shown nearly 30 per cent of UK small and medium-sized enterprises (SMEs) require funding simply to stay afloat, and the most common funding request comes in at around £30,000. Naturally, limiting access to this finance can not only hinder small business growth, but negatively impact wider economic progress too.

By taking the data that banks have – and are often reluctant to lend on – the rise of Open Banking is putting the power in the hands of small businesses, and the providers that are truly dedicated to funding their growth.


Eliminating the hassle

At Liberis, we were the first in the UK market to process a full small business funding application via Open Banking in May 2018, and we have since seen the benefits to small businesses first-hand. These include: increased transparency, smoother form-filling, fairer credit decisions and greater growth opportunities – and these are just the beginning.

With the use of our secure Open Banking API, which is powered by Openwrks, we can use Open Banking technology with all applying businesses (provided they work with a compatible bank) to support the application process by gathering bank statements and revenue documentation at the click of a button. We can then use this data to price and decision the applying business appropriately. It’s speedier, it’s smoother and, by swapping out the attached documents for those secure APIs, it’s safer too.

In particular, proving what their revenues have been can be a tougher step for small businesses than it is for single consumers applying for finance. Naturally, a consumer’s revenue is just their salary. Applying small business owners need to speak with their business bank as well as their card payment processors to access this information. Thankfully for the world of busy entrepreneurs, the use of Open Banking is now eliminating this hassle.

It will take some steps to improve this process on a wider scale as the data is less mature and less commonly dealt with. But we have already taken steps towards using the process to improve our customer journey and responsibly fast-track small business’ development.


The opinion on Open Banking

Open Banking technology is, without a doubt, a huge milestone in the financial world. And the resulting faster applications and an increased access to funding is exactly what the small business community requires; however, when it comes to a new form of data sharing there can naturally be an element of initial uncertainty.

That said, since we implemented Open Banking into our funding process, we’ve had an extremely positive response from customers. We’ve found that, particularly in the case of Open Banking, if you’re offering a product that businesses truly value, they are generally happy to engage with new processes – which actually makes applying for the product that much easier.

Whilst there are a lot of providers out there and solutions to suit every business type, awareness of these options is still low. Our research has found that, whilst 62 per cent of UK SMEs say they need funding to grow and expand, 57 per cent were unsure who or where to obtain funding from and 53 per cent did not have a set amount in mind when looking to access finance.

Increased education in small business finance and the options for application is clearly needed. As leaders in the alternative finance space, we are keen to shine a spotlight on this issue to help drive additional support.


Liberis is an alternative finance platform. It was the first to process a small business funding application via Open Banking in the UK market.