Two years on from its launch in the UK, only three fifths (60%) of UK small business decision makers know about Open Banking and are therefore unaware of the profound differences it could make to their business, and the global economy.
A new report from intuit QuickBooks has revealed the findings of its global research project The report identifies three trends that will power this disruption and usher in at least a decade of prosperity and financial wellness for the nation’s small business owners.
- Feel-good Banking: Open Banking will encourage a real intelligence derived from small business owners’ data through AI, giving them control and lessening the financial stresses and administrative burdens that come with running a business today.
- Invisible Banking: Open Banking is ushering in a new age of hyper-convenience, known as Banking as a Service (BaaS). Banks will shift towards becoming intelligent and invisible, and involve business owners taking meaningful decisions while administrative tasks happen seamlessly in the background.
- Customer-First Banking: Open Banking is providing small businesses greater ownership of their data. They will have more control and choice to build their Financial Wardrobe – products personalized to their needs that power their productivity and success.
Chris Evans, Vice President and UK Country Manager at Intuit QuickBooks said: “A first-of-its-kind, the report looks at the opportunities Open Banking and associated technologies can bring to small businesses in the UK. Focusing on the catalyst for change that is Open Banking, it paints a picture of a future where financial services and small businesses work hand in hand to drive business success. This is something we at Intuit QuickBooks passionately believe in and work towards every day. ”
“The Open Banking revolution will empower the small business owners that want to do things differently and embrace new and better ways of working. We can already see how our customers are benefiting from cleaner, richer data from their bank connection within QuickBooks. And, as the full extent of Open Banking capabilities materialise, those that want to power their productivity will build personalised suites of financial services that suit their individual needs and supercharge their competitiveness in market.”
The new future of a mix and match, customisable approach to financial services will see SMEs being able to tailor their financial ‘wardrobe’ to their specific needs – and remove the importance or necessity of having to switch their main banking provider to be able to access the best products.
As the report outlines, many small businesses feel compelled to stay with their existing bank. They worry about whether payments might go missing or that switching accounts may create accounting headaches. This is holding back many businesses from accessing the best financial products, as they are confined to those available from their particular bank account provider. According to QuickBooks research commissioned for the report, almost a third (32%) of SMEs describe poor finance options as holding their business back from growing.
The report says Open Banking opens doors to a new financial marketplace that is more accessible and open – small business owners will be able to choose from an array of options from many different financial providers, both incumbent and new, who will be competing on price and service. This means; rather than being restricted to the products and services provided solely by their own bank in the past. More than two in five (44%) SMEs agree Open Banking will make the choice of loan providers better, while 36% agree loan rates will be improved.
It will also cut down the administrative time needed to monitor and apply for the most competitive deals, appealing to a younger generation of SME business owners (a quarter (24%) of those aged 18-34 feel they spend too much time managing their business finances).