Payit by NatWest: Open Banking saving UK businesses hundreds of hours annually
UK businesses already using Open Banking have reported saving 150 hours annually on operational tasks and, also, reaping financial rewards, according to new research.
The survey by Payit by Natwest, which was conducted among 150 business leaders across UK businesses with an annual revenue of £2 million or more, revealed that 66% are “very familiar” with Open Banking.
Those users reported an average annual saving of 150 hours that would usually be spent on operational tasks, such as processing invoices and financial data, recurring payments and processing refunds.
Payit by NatWest found that business leaders using Open Banking among their payment systems spent, on average, 44.5 hours a month on finance tasks, compared to just over 57 hours spent by those who don’t use Open Banking, which across the year works out at more than 150 hours, or over four working weeks.
The research found that businesses which are not using Open Banking typically spend £1,687 more on payment processes each year, and £1,117 more on card processing fees than those with the technology in place – amounting to an 8% difference annually.
Businesses with higher revenues report more familiarity with Open Banking, with that familiarity declining in line with a decrease in revenue, the research showed.
There is also evidence that organisations with Open Banking technology face fewer issues with “common” finance tasks, given that 26% of those using Open Banking view late payments as a top issue, compared to 42% of non-users.
Mike Elliff, chief executive officer of Payit by NatWest, said: “It’s encouraging to see UK businesses embracing Open Banking and benefitting from the operational and cost efficiencies it can bring.
“We hope to see this awareness and adoption of new payment solutions grow and would encourage businesses to give it a go.”
Respondents to the survey identified several benefits of having access to the real-time data that Open Banking offers, including helping to develop the customer experience (39%), improve payment efficiencies and lower operational costs (37%).
However, concerns about cybersecurity risks were cited by 48% of respondents as one of the barriers to Open Banking adoption among businesses.
Elliff said that, despite security and fraud concerns, businesses can be “confident” that Open Banking is based on the security inherent in their online or app-based bank account.
“Wider understanding of this could help tackle barriers to implementation and open opportunities for businesses to lower operational spend and move closer to their objectives,” he added.
Open Banking reached its six-year anniversary earlier this month, with Stephen Wright, head of corporate and regulatory APIs at NatWest, remarking that the UK is still waiting for that ‘killer’ use case.
He said: “However, while Open Banking is used by around 10% of the adult population, its use cases are limited and have not yet entered daily or weekly usage for most consumers and businesses.”