Open Banking is set to fuel prosperity for Britain’s SMEs
Today, Intuit QuickBooks reveals the findings of its global research project “TheOpen Banking Revolution: Invisible, Customer-First, Feel Good”. A first of its kind, this report produced by renowned futures consultancy The Future Laboratory, looks at how Open Banking is set to change the nature of entrepreneurialism, small business and broader society in the coming decade.
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.
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 Future for SMEs
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.
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).
The benefits are already here
Within QuickBooks, through Open Banking, small businesses can easily integrate two years’ of bank transactions for richer insights, from overview dashboards to detailed reports. New functionality within the product, such as the QuickBooks 90-day Cash Flow Planner – which was announced at the end of 2019 – is an innovative tool which will benefit from the rich, accurate and historic transaction data to provide improved benefits and insights to customers.
As the report states, China is already embracing this concept. WeChat, China’s ‘super app’, can already do everything from insurance to investments; invoicing to peer-to-peer payments. Open Banking has the power to drive a supercharged version of this solution, using an interconnected suite of specialist financial products that in combination offer the best possible solution for each entrepreneur’s unique business needs.
The Open Banking revolution is about to take off. It’s time for Britain’s small businesses to embrace the opportunity.
For more information and to read the full report, visit: www.quickbooks.co.uk/open-banking-revolution