As Open Banking spreads further into the small business (SMB) financial services market, accounting and lending platforms are taking advantage.
This week's exploration of the latest in bank-FinTech collaborations and data integrations finds an opportunity for accounting portals to drive customer loyalty through data connectivity, while lenders embrace strengthened risk mitigation by looping directly into borrower data. Plus, a major U.S. bank sets its data sharing rules for FinTech firms.
JPMorgan Sets FinTech Data Deadline
As the U.S. continues a steady migration toward Open Banking, financial institution JPMorgan Chase has reportedly set a deadline for third-party FinTech firms to access its customers' data.
Reports in Reuters, citing unnamed sources, said that the bank has set a deadline of July 30 for FinTech firms to sign data access agreements, and will require those FinTech firms to support an initiative that would have them stop using customers' own passwords to access their bank data as a way to power the firms' solutions. If FinTech firms don't agree, JPMorgan will bar them from accessing the information, reports said, as well as screen-scraping tools.
A spokesperson for the bank confirmed reports, noting that JPMorgan had already signed agreements that cover about 95 percent of data access requests.
FreshBooks Inks Tax Integration Deal
Small business accounting platform FreshBooks recently announced an agreement to integrate with Taxfyle, a data sharing arrangement that aims to automate tax prep for small business owners. Taxfyle will integrate with FreshBooks to streamline data aggregation and eliminate the need for manual data entry, the companies said in their announcement.
In the press release, Taxfyle emphasized the value-added opportunities that data integration presents in the small business FinTech space — and not only for the small business end user.
"Based on other partnerships in this realm, Taxfyle has found that when bookkeeping services integrate a tax-filing function into their platform[s], customer churn drops by about 30 percent month over month," the announcement stated.
Xero, Square Integrate For Faster Invoice Payments
In another FinTech integration announcement, small business accounting platform Xero announced that payments company Square will support connectivity that allows invoices sent via Xero to include built-in Square payments functionality.
When invoices are paid via Square, transaction data is then automatically added into the Xero platform. The integration also expands visibility for small business owners and accountants into daily sales via Square point-of-sale technology, a move that deepens the connection between SMBs' front and back offices.
Simply Completes First Open Banking Funding
Small business lending company Simply Asset Finance recently announced that it has completed its first funding deal using Open Banking. Simply said that one of its small business customers provided permission for the lender to access its banking data, which enabled Simply to connect directly with digital financial statements for enhanced underwriting and an accelerated process.
In a statement, Simply COO Ylva Oertengren said that Open Banking and data integrations can expand a lender's view of a small business beyond the credit score.
"Open Banking gives us the insight we need, and makes the journey quicker and easier for the customer," Oertengren said.
Funding Xchange Unlocks SMB Data For Loan Quotes
U.K. small business lending marketplace Funding Xchange announced this week its adoption of Open Banking to personalize small business loan quotes on its platform through a collaboration with AccountScore.
Reports in The FinTech Times said that Funding Xchange will be able to unlock small business financial data to enhance the process through which SMB applicants are presented with loan offers, an initiative that the marketplace's CEO Katrin Herrling said would "reduce friction" and accelerate the loan-decisioning process.
Data and analytics firm AccountScore will facilitate the data integration via its Open Banking solution. In another statement, AccountScore CEO Emma Steeley said, "It is wonderful to see the growth of Open Banking in the [SMB] arena."