In the UK, the Competition and Markets Authority (CMA) has mandated that the nine largest current account providers must offer standardized Application Programming Interfaces (APIs) for current accounts to Account Information Service Providers (AISPs) and for payments to Payment Initiation Service Providers (PISPs).
What does this mean? By providing access to this data from third parties and banks, Open Banking provides small businesses with the opportunity, through technology such as QuickBooks Online, to have a real-time view of their banking and transactional data.
This will help to more accurately predict tax liability (VAT payments), to proactively manage cashflow, to more quickly provide credit scores for loan and finance applications, and to offer the ability to analyse spend and buying patterns – all to help small businesses best budget their finances.
The UK is not at the forefront of Open Banking innovation globally, but it is estimated that Open Banking has the potential to create a revenue opportunity of at least £7.2bn by 2022 across retail and SME markets.