Coffee Chats, Open Banking & Business Central!
It’s still not fun getting told off in your thirties
It’s not super enjoyable to get told off, especially at a conference. That said, it’s good when life isn’t boring! Recently I took the opportunity at a conference break over a cold cup of coffee to chat to someone involved the admin of open banking in the UK. I made the mistake of explaining that while open banking is brilliant, it was clearly targeted at consumers rather than businesses.
Cue 30 seconds of being told how wrong I was, how there were business stakeholders in from the earliest discussions, how I should get up to date with the latest developments, and then a brusque storm off. I downed my coffee, looked furtively to see that no one had overheard, and felt I handled it all rather well.
I’ll tell you what I didn’t get the chance to explain to this person, and what you should know if you want to introduce open banking for your business. I’ll be super-quick, and you can go back to scrolling LinkedIn for recruiters and life coaches.
At Yavrio, we love open banking, but we also expand our vision beyond the basics of open banking, and embrace the wider fintech ecosystem in order to create the best product set out there.
Business, me and Open Banking
I’ve spent much of the last few years explaining to finance departments how open banking fundamentally changes aspects of their business. Educating teams who have been having to do manual reconciliation and payments for decades is actually really enjoyable as they see how much easier things are in the new world we live in.
Live balances from their bank, instant statements into their reconciliations, AI techniques to eliminate manual matching and the first time that businesses have the fullest visibility of their financial data in their own systems, rather than in the banks’.
Add to that the security of eliminating files and doing everything through secured APIs, and what’s not to love?
In 2023, the average open banking user (businesses and consumers) made only 2.6 payments. I don’t know about your business, but does that sound right? Well, the truth is that both in the UK and across Europe, open banking is in many cases not set up to enable large numbers of payments.
Banks have been slow to adopt technology like bulk payments, in many cases only allowing 15 or 25 payments at a time – annoying if you have a few hundred people to pay!
Likewise, OBIE rules initially meant that companies had to ‘reconsent’ to connect their banks every 90 days (thankfully updated later to every 6 months) – but this up & down connection again meant that people were looking to their banks for live information, balances, transactions, etc., and annoyed when they found everything disconnected.
Poor planning and calibration on these fronts resulted in a lack of uptake in the market, as well as churn when people found their initial hopes not met.
Yavrio and bringing solutions
While we continue to speak to banks and fintech partners to work on improving the current open banking infrastructure, our teams have been busy working on products and partnerships that bypass the limitations of the market.
Want bulk domestic payments with BACS via API? No problem – we can connect you directly to the source with no files required.
Automated bank recs that actually work? Our new Magic Bank Rec functionality (yes, we’ve had arguments about the name) is matching off payments for clients with 90,000 records without breaking a sweat.
I’ve high hopes that the coming years will see banks and regulatory bodies recognise the unique challenges for businesses and upgrade infrastructure to cater for this, and we’ll be championing that growth. But while we wait for utopia, we’ll be here building out the best product set to make banking work for business.