UK’s Business Financial Platform Tide to Leverage Open Banking to Enhance Services

Tide, the UK’s leading business financial platform serving over 375,000 SMEs – nearly 7% of the market, has revealed that it will allow SMEs to connect their existing business accounts, “held at other institutions, to its platform using Open Banking.”

In the first such move by an SME banking platform, this should allow small businesses to save time and money “on their financial admin, by using the full range of finance and admin products available on the Tide platform, without opening a Tide business account.”

The announcement also mentioned that the Tide platform will be “gradually opened up to offer access to more and more products over time.”

Oliver Prill, Tide CEO stated:

“Tide has been enormously successful in attracting new businesses, by helping them start out – helping business owners to register their businesses and open a current account quickly and easily. We will continue to serve new businesses, with the Tide current account and an ever expanding set of starting out services.”

Prill added:

“However, with established businesses generally not switching banking providers or having multiple banking providers, we reached the conclusion that the only material way competition can be introduced for the established businesses is to allow them to virtually switch to use the Tide platform without actually switching bank accounts. This involves linking their existing bank account into the Tide platform via open banking to access our full range of finance & admin services.

The update also noted that businesses will not only be able to use services like invoicing, but, in time, Open Banking will also allow them to review and conduct payments via their existing bank account through the Tide platform.

As such, this will not only provide competition into the established SME segment, but will also offer a powerful boost to Open Banking for SMEs.

Kevin Hollinrake MP, Co-Chair, All Party Parliamentary Group on Fair Business Banking, remarked:

“Giving businesses access to a wider range of time-saving, productivity-enhancing services without the hassle of changing banks is very big news and a ground-breaking innovation for business banking. More competition means more choice, better service and lower fees for businesses and we very much welcome this revolutionary approach.”

Increasing competition in the business banking market has been “a priority for government and regulators for a number of years.”

While with the help of the RBS Alternative Remedies Fund good progress has been made in introducing competition in the new business segment, “doing the same for established businesses has been more challenging.”

Surveys regularly report that “around 13% of businesses look to switch banks within 12 months, yet in practice only an estimated 4% actually switch per annum.”  Only 4% are “estimated to have accounts at different providers,” the update revealed.

The announcement further noted that this gap between intention and action is “explained by the high demand business owners have on their time and the complexity of informing business partners of new bank details.”

Tide’s Open Access move is sponsored by the RBS Alternative Remedies Fund Pool E  Tide targets “serving 100,000 businesses with third party bank accounts by end 2022,” the announcement noted.

Beginning today, Tide will be giving business owners the chance to link their third party business bank account to Tide to access Tide Cashflow Insights, a product that “predicts a business’s future cash flow, using data from their business bank account.”

Tide will quickly scale its Open Access offering, “giving businesses with third party bank accounts the ability to connect to Tide and use products ranging from invoicing, to expense management, payroll and credit services,” the update noted.

Open Access will further set Tide apart from traditional and neobanks, that “make holding a bank account with them a requirement.”

Prill added:

“Tide is a business financial platform. On the platform, businesses have a choice between using Tide or partner label products. Now we are extending this concept to current accounts. We are all about serving small businesses optimally making sure that all products work seamlessly together, not about forcing SMEs into a Tide label product.”

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