Almost two years since the introduction of Open Banking, new independent research* from Intuit QuickBooks today reveals a startling lack of awareness or knowledge of this banking revolution.
Although the majority (69%) of small businesses have heard of the term, almost half (45%) are unable to explain it, or don’t fully understand what it is. Almost half (48%) do not think the technology will have any impact on their business.
This is despite the dramatic improvement Open Banking could bring to business cash flow management. Poor cash flow management remains the number one reason for small business failure in the UK.(1)
There is one glimmer of hope. The same small business owners say additional nudges would influence their adoption of Open Banking with over half (59%) crying out for more information about what it is and what the impact would be for their business.
Rob Burlison, Director of Corporate Affairs at Intuit QuickBooks said: “Today’s research shows that small businesses are in danger of missing out on the massive benefits Open Banking could bring. It is clear that as an industry we could do more to assure businesses of the security measures in place and demonstrate the tangible benefits of Open Banking and connected technology.
“Cash flow remains the number one reason for small business failure and with half of businesses that start in the UK still failing within the first five years, Open Banking is a great opportunity to help more small businesses in the UK thrive.”
Open Banking already gives businesses the power to see all their finances in one place, keeping on top of their cash flow and building the resilience of their business against unexpected financial shocks.
Yet only a quarter (27%) of small businesses are currently saying they would value having full visibility of their business financial health in a single place.
Burlison added: “Ensuring that we can provide a best-in-class financial management solution through fully open APIs is just the start of what QuickBooks is offering small businesses.
“The birds-eye view of their financial position, alongside the machine learning capabilities of our software, will help small businesses get that much closer to mastering their cash flow and thriving for years to come.”
Accountants will also have a significant impact in encouraging business owners to embrace the opportunities offered by Open Banking. Small business owners are more likely to cite their accountant than any other source to help them with Open Banking.
QuickBooks has already started integrating its accounting software with a number of digital banks including Revolut and Monzo to save small business owners time, while promoting accuracy and efficiency in how they digest financial data for bookkeeping. Additionally, QuickBooks customers can now also create new connections with Lloyds, Halifax, Bank of Scotland, Santander, Barclays, MBNA, RBS and NatWest as well as the digital banks Revolut and Monzo using these new advanced protocols.