Open Banking for Businesses: From Myth to Reality
Open Banking — the concept of financial institutions such as banks opening up their data for secure, third party access — has been a much-discussed pathway to financial services innovation for years.
Historically, access to bank account information was limited only to the banks that kept this information. With open banking, access to account information is democratised. Consumers and businesses get instant access to and have better control over their data. Open banking allows a licensed third-party provider to view banking transaction data with the user’s consent, in order to deliver a value-adding service or product.
Until today, however, Open Banking is mainly used for credit decisioning, KYC, consumer budgeting apps and one-off payments. The real impact and day-to-day visibility especially for business customers have been fairly limited so far.
Banking — Open for Businesses
Airbank: Eliminate finance overhead and save on payment spendings
At Airbank, we set out to make B2B Open Banking a reality. Airbank uses Open Banking APIs to access financial information from different banks and aggregate all that information in one location: The Airbank App. There within lies a great benefit for users to eliminate finance overhead and save on their payment spendings:
1. Unified access: Multi-banking eliminates the need to log in to several different websites or apps to see and manage bank accounts, wallets, credit cards, loans, etc. With one single password, users can access all your accounts across multiple providers.
2. Team permissions and access rights: Multi-banking allows finance teams to collaborate and set custom permissions across the team, enabling seamless workflows and increasing account access and security.
3. Accounts receivables management: With dynamic search and flexible viewing options, finance professionals get complete insights into their transaction data and accounts receivables.
4. Cash flow insights: Pulling all banking data and categorising transactions provides full transparency into businesses cashflows. This includes total cash balances across all accounts, recurring payments and subscriptions. Based on this, CFOs get insightful trend analyses and recommendations to better manage their liquidity. Airbank’s cash flow management, for example, means improved decision making for finance professionals who enjoy complete visibility of real-time cash position, freeing up locked working capital.
5. Month-end closing: Another benefit of enriched bank transaction data are simplified month-end closings through automatic bank reconciliation, categorisation and DATEV or other accounting uploads. The cash flow statement is generated using a direct method, instead of an indirect method, shifting the cash flows from a retrospective piece of information to forward-looking decision support. In some cases, time to month-end closing is reduced by a full 7 days.
Banks’ role in Open Banking for SMEs
Banks aren’t well-placed to execute on innovation quickly, nor keep up with the needs of the modern consumers and SMBs. However, 99% of businesses still bank with incumbent banks. This is the status-quo today.
Thanks to Open Banking, third-party providers can, with the user’s consent, access account information and payment services to deliver a more customer-centric user experience. That’s why we’re building Airbank to run on top of businesses’ existing banks. Airbank offers a delightful banking experience while integrating as well with accounting solutions. Even further, users can pay and get instant insights into their cashflows.
Integrated finance is the key for smooth businesses processes, from banking and payments to cash flow management. Airbank enables small and growing businesses across Europe to marry bank statements with business logic for an enriched history of payment transactions.
That way we empower finance teams to focus on solving the mission-critical problems of the business instead of having to piece together the jigsaw puzzle of bank transactions by hand.