Small firms still wary about Open Banking
OPEN Banking is being held back by a lack of trust among small businesses, a new survey has found.
The Federation of Small Businesses (FSB) surveyed more than 1,000 of its members and found that just 15 per cent of small firms are currently sharing their business bank account data electronically with third parties, mostly to update accountancy software.
Around two thirds (65 per cent) of small firms say they would not consider sharing their banking data with other financial services providers electronically. Among these firms, 43 per cent believe that sharing banking data in this way is unsafe, while a similar proportion (37 per cent) are ‘unsure about the benefits’ of doing so.
Read more: Open Banking yet to provide ‘seismic shift’
85 per cent of smaller business owners who would not consider sharing their business bank account data with other financial services providers electronically are ‘wary’ about doing so.
“We’re two years on from the introduction of Open Banking but very few small firms have reaped any benefit from it,” said FSB National Chairman Mike Cherry.
“We’ve always said that – done right – the benefits of Open Banking will be huge. Giving small businesses the ability to integrate cashflow, invoice, payroll, utilities and tax data in one place means giving them the ability to identify new efficiencies. And by sharing that big picture with trusted experts, gains should be amplified.
Read more: Open Banking access ‘improving’, but most banks still fall short
“However, the financial crash casts a long shadow. A lot of small business owners still don’t trust lenders to do the right thing.
“This was always going to be a hard sell – one moment we business owners are told to do all we can to protect sensitive data, the next we’re being told it’s safe to dish it out.
“We need to see a concerted effort from the government, banks and the Financial Conduct Authority (FCA) to ensure that Open Banking application programming interfaces are absolutely watertight, and small business owners are fully aware of the benefits of using them. Key to this is awareness-raising, and clarity around who is responsible for cybersecurity breaches and protections for smaller firms.
“The incoming head of the FCA should make this a top priority for their tenure. There’s still time yet for a small business banking revolution.”
Read more: Bud launches new Open Banking platform for SMEs and fintechs
