As financial service providers deploy new solutions on the heels of open banking regulatory initiatives in the U.K. and Europe, players in other geographies have also found opportunity to embrace data sharing.
This week’s look at the latest open banking efforts and bank-FinTech collaborations reveals small business lending to be an emerging bright-spot in this field. Alternative lenders, major banks and newer FinTechs have added new ways for data sharing to expand access to capital for small and medium-sized businesses (SMBs), with industry collaboration at the center of many of these efforts.
iwoca Drives SMB Lending Ecosystem Connectivity
With a solution it dubs OpenLending, small business lending platform iwoca is encouraging players in the small business lending ecosystem, including banks and FinTechs, to collaborate to facilitate lending to SMBs. The company announced this week that 14 partners have signed on to OpenLending, which offers an API to connects banks, FinTechs, brokers, accountants and bookkeeping platforms on a single portal to customize their loan offerings.
In a statement, iwoca CEO and Co-Founder Christoph Rieche said the solution “has the potential — through collaboration with the banks and FinTech partners — to fix some of the biggest problems SMEs face in the coming months.”
The company noted that Xero will be the newest partner on OpenLending as it explores adding a custom finance solution to its own portal next year.
Standard Chartered Enters Banking-as-a-Service
The tool also connects third-party platforms, including eCommerce, ride-hailing and social media portals, with the ability to offer their own customers access to Standard Chartered loans, credit cards and savings accounts under their own brand names.
According to a press release, Standard Chartered is launching its BaaS offering first with a major eCommerce platform in Indonesia, with plans to expand across Asia, Africa and the Middle East - a reflection of the region's potential to welcome open banking-like business models to expand access to capital and financial services.
Open Banking Eases Financing Search Via Swoop
In a recent interview with Forbes, Andrea Reynolds, co-founder and CEO of Swoop, explored how the company is wielding open banking to ease the financing search for businesses in the U.K. Open banking enables the tool to aggregate data from small business applicants’ bank accounts to connect users to the most appropriate funding source.
This is especially effective for debt funding, Reynolds told the publication, with each lender using its own risk criteria to approve or reject applications. Automated data collection means having the greatest chance of success.
“Open banking — although relatively new — is demonstrating its ability to help businesses (and consumers) manage their finances and access capital more effectively,” the publication wrote.
Santander Turns To M&A For Trade Finance
Though collaborating with FinTechs is a popular way for banks to augment their product offering, Banco Santander has opted for the M&A route to expand its trade finance operations. The bank announced the acquisition of a 50.1 percent majority stake in Mercury TFS, a trade finance software company.
Santander had already been using the FinTech’s solution for its business customers across Spain, Mexico, Chile and Germany, according to reports, while Santander’s Global Trade Services unit will also roll out the offering in the U.K. and Portugal.
“The investment accelerates our plans to build a service platform for SMEs and international companies to better serve our customers worldwide,” said Santander Head of Global Payment Services Javier San Félix in a statement.
U.S. Bank Taps Fiserv For Data Transfers
In the United States, U.S. Bank is the latest financial institution to embrace opportunities in data sharing, and has tapped FinTech Fiserv to facilitate that process. In an announcement, U.S. Bank and Fiserv are working together to allow U.S. Bank customers to more efficiently connect their financial information with third-party apps via secure application programming interface (API).
The tie-up wields Fiserv’s AllData Aggregation solution, which is able to collect information across more than 18,000 sources.
In a statement, U.S. Bank Executive Vice President of Digital Platforms Gareth Gaston said the partnership aims “to give our customers experiences with their money that are fast, easy, and make their financial lives simpler.”