BUSINESS finance aggregator Funding Options and financial services app Bud have been named among the 10 winners of innovation charity Nesta’s Open Up Challenge.
The Open Up Challenge is a £5m prize fund to inspire the creation of next-generation services, apps and tools for small and medium-sized enterprises to make use of Open Banking.
The competition started with 20 entrants who received £50,000 each to test ideas and the 10 winners each receive a £100,000 cash prize to develop their products further.
“The 10 teams awarded a prize demonstrated to the judging panel that they are using new technologies to solve real small business problems and have the potential to achieve impact at scale in 2018 and beyond,” Chris Gorst, challenge prize lead at Nesta, said.
“Useful innovation has been slow to come in small business banking, imposing real costs on the entrepreneurial economy and hitting small business productivity. But the UK is perfectly placed to make rapid progress, as a global leader in fintech and open data innovation. Open Banking could radically reduce barriers for new players and models to emerge and this is good news for small businesses.
“The quality of propositions emerging from the challenge demonstrates that there is a groundswell of pent-up innovation ready to come to market. We are excited to be deploying Nesta’s expertise in challenge prizes to accelerate innovation in this vital area for the UK economy.”
Bud and Funding Options were named winners alongside business loans comparison tool Capitalise, freelancer current account Coconut, credit score analysts Credit Data Research, cashflow forecaster Fluidly, automated financial assistant Fractal Labs, Business data monitor Handle, alternative lender iwoca and bank account technology provider Teller.
The competition comes as a European directive – the Payment Services Directive II – comes into effect next year mandating banks to share consumer data with third-party providers, including alternative lenders. The UK’s Competition and Markets Authority is pushing through similar legislation at the same time, referred to as Open Banking.
For more on Open Banking, look out for our feature in the upcoming issue of Peer2Peer Finance News.