Open banking allows accountants to deliver added value for clients

A new survey has found that more and more SMEs are turning to open banking to make their businesses more efficient, a move that offers accountants opportunities to deliver added value to clients.

Open Banking was launched in the UK in 2017, following the Competition and Markets Authority (CMA) investigation which ordered the nine largest retail banks in Great Britain and Northern Ireland to pay for and set up an independent Open Banking Implementation Entity.

How does open banking work?

Now the Open Banking Implementation Entity (OBIE) has published its latest Open Banking Impact Report showing the continued growth of open banking enabled services across the UK.

There are more than six million regular users of open banking-enabled services in the UK, according to the bi-annual report’s figures.
Open Banking allows SMEs the ability to handle their accounts in a more efficient way. However, with a large pool of financial products and services to choose from, clients will need guidance and expertise to make the right decisions and that’s where their accountants can offer expert guidance.

The OBIE figures show:

• There were 21.1 million open banking payments in the six months to March 2022, compared to 6.1 million over the same period in the previous year. Month-on-month growth is running at around 10 per cent.
• Around 11 per cent of digitally-enabled consumers and small businesses used open banking during March 2022, this was up from 6-7 per cent in March 2021.
• Many small businesses were early adopters of open banking technology, particularly cloud accounting, but consumer offerings are now catching up.

The latest report highlights how small businesses are utilising cloud accounting. It gives companies the ability to connect their bank account to their chosen accounting service. This, in turn, allows accountants to develop a more advisory, support and strategic planning role.

They can deliver added value by using their skills to make sure business finances are handled in the most efficient way and in real time.

More accurate assessment for SMEs

The report added that a large majority (77 per cent) of respondents report that they now have more immediate and accurate insights into their financial position at any given time, as a result of using these services.

For help and advice on exploring the benefits on open banking and related matters, contact our expert team.