Why open banking could be your key to business success
Posted on by Katie Hook
Estimated read time: 4 mins
“This is a huge step forward – it will enable us to further help business owners to manage and grow their business”
Iain Colbeck – Head of Product, Experian Business Assist
Securing credit is the lifeblood of many successful SMEs, whether it’s a traditional bank loan for essential tools, a bridging loan to cover outgoing expenses during lean months, or credit in the form of asset finance.
But for some SMEs, securing credit can be a real challenge because of a limited credit history. Although tools such as Experian’s My Business Profile allow you to track your business credit score, what happens when your credit file has just a handful of accounts listed on it, or your business is fairly new?
This is a very real issue for many small businesses throughout the UK today, but with the help of Open Banking, this could well now be a thing of the past.
Open Banking is a new secure way to give financial service providers access to your financial information securely. Earlier this month Experian received accreditation from the FCA that will allow Experian to help people and organisations benefit from the Open Banking initiative.
So what does that mean for you if you’re a small business owner?
The launch of Experian’s Open Banking platform puts you firmly in the driver’s seat, with your company’s financial information at your fingertips. By choosing to share bank account information with financial service providers you can receive the most appropriate products, improved services and better deals.
Explaining how Open Banking will help UK SMEs, Iain Colbeck (Head of Product, Experian Business Assist) says:
“Open Banking will at last provide a level playing field for the backbone of the UK economy – SMEs. This data will enable better informed decisions to be made by both the SME and those corporate businesses who make decisions about SMEs. Finally, data-driven decisions can be made that will help every SME in the UK protect, manage and grow their business, making them safer, smarter and brighter.”
Iain goes on to say “This is a huge step forward – it will enable us to further help business owners to manage and grow their business. Open Banking is a hugely positive evolution for the consumer, but we shouldn’t forget that it is equally important for all small businesses across the UK.”
The benefits of Open Banking are far reaching. By putting small business owners in control of their own financial data, it offers a real solution to the common issue of banks being reluctant to lend to smaller firms.
Times are changing and if you’re a small business owner, your financial data is key to making informed decisions about how to protect, manage and grow your business and steer it to success.
To track your own business credit score and see your business credit score as it is seen by others, click here.