SME Finance Takes Centre Stages As Finalists Are Selected For Open Banking Challenge

UK innovation agency NESTA has named twelve companies that will go on to take part in the final stages of a competition designed to encourage fintech companies to develop Open Banking– based services for SMEs.   

Known as the Open Up challenge, the competition has been running since last year. In the latest leg, the twelve participating challengers will each receive grants of £100,000 to help them bring services to market. Equally important, they will have access to real Open Banking data as they develop those services.  

Under Open Banking rules that came into force in January 2018, Britain’s nine biggest banks, along with one mutual society, are required to make current account information available to licensed rivals through a secure software platform. In theory, that means that up and coming fintech companies and challenger banks, will be able to use account information provided by the big players underpin their own services – provided the customer gives consent.  The intention is to open up the banking market to a new front of competition.

Open Banking has has some impact on personal banking. For instance, budgeting app, Yolt has used the Open Banking infrastructure to sync its service not only with data from big banks such as Lloyds and RBS but also the up and coming mobile challengers, Starling and Monzo. However, to date, we have not seen a rush of open-banking enabled services aimed at businesses.

Accessing Finance

The Open Up competition is focused on services that will help small and medium sized companies. As the ‘challenge’ enters its final phase, several participants are working on ways to help SMEs to  access finance more easily.

For instance Peer-to-Peer lender,  Funding Circle  made the list of finalists on the basis of plans to use Open Banking  to help its small business customers manage their money effectively and, thus, improve their eligibility to borrow.  

Another of those taking part –Funding Options –  connects SMEs with active lenders. It is using data provided by Open Banking to predict cash flow issues for companies. That information can then be used to help the businesses secure any additional finance they might need from the most appropriate lender.  In broadly the same space, Finpoint and Swoop are also using Open Banking to offer businesses better access to funds.  

Over the next twelve months, NESTA is expecting finalists to not only build but also market their solutions and the five most successful will receive a further £200,000.


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