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Keeping business moving with Open Finance

28-02-2024|By Andrew McKee, Chief Information Officer

A look back at the evolution of Open Finance since 2018 and how we use the technology to support the ambitions of businesses

Open Finance is the direct evolution of Open Banking, a concept that has been promising to revolutionise access to financial products for the last six years and is projected to grow at 25% per year in all sectors. Some 80% of banks now support Open Banking, 80% of SMEs use an accounting platform that supports open access, and a recent survey conducted by Open Banking Limited showed that around 750,000 of UK SMEs have already adopted the solution, many as part of cloud accountancy packages. Open Finance provides a whole range of benefits, both for individuals and businesses, from additional data insights to help with finance management to reducing effort and risk when sharing financial information.

At Ultimate Finance we’ve been bringing the benefits of Open Finance to our Working Capital clients and introducers since Open Banking officially kicked off the current round of innovation in the UK in 2018 with the Open Banking PSD2 directive. Over the years, we have added Open Accounting (an automatic integration into a client’s accounting package to eliminate the need for manual data extraction and import, reducing operational costs and risks) and evaluated a huge range of tools the industry has to offer to ensure we always provide our customers with the right technology and the benefits it can offer them.

We are delighted to have already seen many benefits to our clients, introducers, and our teams:

  • Faster decision making – For instance, creating the opportunity to provide credit backed offers in just 24 hours thanks to the time saved on retrieving and sharing financial documents.
  • Better conversations with clients – We have been able to allocate more time to discuss data insights to help our clients make better and faster strategic decisions that help their business keep moving.
  • Switching to an “always on” mindset – our clients and our team are able to look at the same real time data in discussions, which makes for efficient processes and a speedy delivery of our services.

Lessons learned from pioneering Open Finance

So, what have we learned? Mainly that it is undeniable that there are many benefits to be unlocked through Open Finance, but also that, as most tools and processes used in the provision of financial services, it should not be seen as a “fix-all” solution, and lenders, introducers and business owners’ collaboration will be key to shaping a fully open future.

Many of the tools out there have been designed for consumers of much simpler financial products rather than asset-based solutions such as Invoice Finance. This means that, as a lender, we must be aware that some of the technology available may not be suitable as it serves a very specific use case that may not be relevant – or the right option – for the businesses we support.

While the journey is simple for 90% of clients, for some it could still be overwhelming and therefore providing dedicated support to take clients through the onboarding journey and increasing their understanding of the technology and why it can help them is a critical must-have. Making sure businesses who have a complicated technical setup, or an unsupported bank account get clear support will help to build confidence and drive future adoption of the technology.

Addressing customers’ concerns around data sharing remains primordial as they, rightly, expect us to be a responsible lender and therefore responsible custodians of their data in line with policies such as GDPR requirements.

Reviewing processes to ensure the implementation of the technology makes sense and works for us and our customers is as important as implanting it in the first place. Spending time with operational staff and Risk teams to help them understand the tools and how they can be used has been key to creating advocates of Open Finance. As is often the case in business, this takes consistency and resilience to implement an “always on” model and processes.

The future is open

At Ultimate Finance we are delighted to have seen adoption rates at over 50%. I am confident that this trend will continue with closer integration between clients’ data and lenders’ platforms, leading us to a change to the nature of the support that customers need from the technical aspects of a lender’s processes to the intricacies of Working Capital and what that means for their business. One thing is certain, the future is looking more open than it was five years ago.




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