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Just over a year ago, Open Banking was introduced in the UK. In case you missed it, Open Banking is a directive targeted at banks to ensure that they share their data securely with authorised organisations.

The objective of Open Banking was to open the way for new products and services to enter the market that could help businesses get a better deal, give them a more detailed understanding of their accounts and help them find new ways to make the most of their money. The Open Banking initiative aimed to put individuals and businesses firmly in control of their financial data and set out to be the secure way for them to give regulated providers access to their financial information. So, what’s happened since the launch?

There definitely wasn’t a rush to get started! A YouGov poll in late summer 2018 found that 72% of adults in the UK hadn’t heard of Open Banking at all! Most analysts feel that real change hasn’t really happened yet, but it is happening. There is a growing feeling that banks have firmly moved from viewing Open Banking as a compliance exercise to viewing it as an opportunity to compete and innovate.

On the product and services side, the Open Banking initiative has led to QuickBooks Online, Xero, Sage and many others introducing new banking features. A plethora of new financial apps have entered the market and the initiative has also coincided with the rise of digital-first banks such as Tide and Starling Bank; both now offer ‘no annual fees’ business banking accounts.

The ability to pull bank data streams directly into accountancy software and apps has enabled businesses to have a more accurate picture of cash flow and credit control.

Open Banking and improving accountancy software are undoubtedly making bank data more accessible, more mobile and therefore more useful. For example, online lenders can now review accounting records, bank statements and income all at the same time, and give funding proposals in minutes rather than days.

There are many ways in which Open Banking can have a positive effect on your business and it’s up to all businesses to make sure their technology systems are set up to take advantage of this. If you need any help and advice on software that could take advantage of Open Banking and help your business, please get in touch and we can talk you through the options.