The majority of SMEs believe financial integrations increase the efficiency of their operations, according to the findings of a new report that puts forward the case for “a fresh approach” to Open Finance that will benefit SMEs.
The research by Codat, which surveyed 1,200 SMEs in the UK, US and Australia, revealed that seven out of 10 businesses say financial integrations make their business operations faster and more efficient.
Businesses think it is more important for a financial app to connect to their accounting software than their bank, with the findings showing that 21% more respondents stated that they would not use an application that didn’t integrate with their accounting software.
The research also found that 82% agreed that sharing data via a portal is seen as more secure than via email.
The findings, which are published in Codat’s Open for Business report, revealed 63% of businesses believe that time spent on accounting admin takes them away from growing their business.
Codat CEO Peter Lord said that the advantage of “fit for purpose” Open Finance for SMEs is evident.
“We firmly believe that small businesses own their financial data and they should be able to share it freely with whomever they like – no matter which system holds that data,” he said.
“Although many small business financial platforms already have open APIs, the reality is that there are significant hidden barriers that make accessing and sharing data difficult. Appropriate regulation should work for all parties and ensure that small and medium-sized businesses everywhere can benefit from Open Finance.”
One of the recommendations made by Codat in its report is that when the Financial Conduct Authority in the UK, the CFPB in the US and other regulatory bodies address and consult on Open Finance, small business needs should receive separate consideration.
It also suggested that the next data sources for Open Finance should be prioritised based on the value of the data sharing process and frequency.