The U.K. Federation of Small Businesses (FSB) has released the results of a survey of small to medium-sized businesses’ (SMBs) embrace of open banking two years since the framework took hold and discovered that SMBs continue to distrust lenders.
According to reports Monday (Jan. 13), fewer than one in seven SMBs surveyed said they are sharing financial data with third-party service providers, and according to the FSB, this lack of data sharing is holding SMBs back from reaping the benefits of open banking in the form of consolidating and streamlining accounting, invoice, payroll, tax, cash flow and other financial information.
“We’re two years on from the introduction of open banking, but very few small firms have reaped any benefit from it,” said FSB Chairman Mike Cherry in a statement. “The financial crash casts a long shadow. A lot of small business owners still don’t trust lenders to do the right thing.”
The FSB surveyed 1,000 SMB owners about their data sharing habits.
Also included in the findings is the fact that two-thirds of surveyed SMBs said they would not consider sharing their bank account data electronically with other financial service providers. About 40 percent said they believe this data sharing practice is unsafe, while more than one-third said they are “unsure of the benefits” such data integration could offer, adding that SMBs remain “wary” of data sharing.
“This was always going to be a hard sell,” Cherry said. “One moment we business owners are told to do all we can to protect sensitive data, the next we’re being told it’s safe to dish it out.”
Cherry and the FSB are calling on the U.K. government and banks to raise awareness among the SMB community about open banking and its potential benefits for entrepreneurs, as well as to reassure businesses that application programming interface (API) integrations are “absolutely watertight,” Cherry said.