Data Sharing, XaaS Target SMB Financing Efficiencies

Accelerated data sharing has become a focal point for small business lenders and FinTechs looking to speed up the time it takes for SMBs to apply for and receive much-needed funding.

This week’s look at the latest in bank-FinTech collaborations and open banking initiatives finds a focus on small business lending: In the U.K., Funding Options struck a data-sharing agreement with 20 alternative lenders to make SMB loan applications more efficient, while in the U.S., Plaid is unlocking payroll data to ease access to federal financing.

But many of these businesses are also looking ahead to drive financial services efficiencies beyond coronavirus disruption. Currencycloud is connecting regional banks to advanced FX and global payments technologies, while the firm’s founder, Nigel Verdon, is also targeting Banking-as-a-Service with his new startup, Railsbank. That firm recently secured funding from Visa, which is also in the process of acquiring Plaid as part of its own wide-ranging open banking initiatives.

Catch up on the most recent efforts to unlock, share and integrate bank data below.

Currencycloud, Derivative Path Team for Bank FX Solutions

Foreign exchange and cross-border payments solution provider Currencycloud and cloud-based derivatives and FX firm Derivative Path have announced a partnership aimed at enabling regional and community banks to integrate cross-border payments technologies.

The companies said in a press release that Currencycloud and Derivative Path are combining their technologies to integrate electronic spot FX execution, third-party cross-border payments, counterparty and order management, compliance and risk management, and other features for smaller financial institutions (FIs), with the companies focused on empowering community banks to more efficiently compete with large global banks with their FX and global payments offerings.

Deloitte, Unqork, Plaid Debut Lending-as-a-Service Tool

Deloitte revealed its new partnership with Unqork and Plaid to introduce a so-called lending-in-a-box solution for small business lenders.

Their joint solution adheres to CARES Act requirements, enabling SMB lenders to facilitate funding to small businesses in need of financial support via PPP loans, their press release noted. Designed to streamline the SMB loan distribution cycle, the lending-as-a-service tool integrates compliance controls with customizable business controls, while Plaid is enabling data integrations across a range of sources to bolster lenders’ underwriting processes.

“The Unqork and Deloitte service incorporates several Plaid products to allow lenders to quickly process CARES Act loans while complying with guidelines,” explained Plaid Head of Partnerships Lowell Putnam in a statement. “Ultimately, this can help speed the delivery of relief funds to more businesses.”

Plaid Unlocks Payroll Data to Support PPP Lending

As more non-bank players are allowed to facilitate PPP lending to U.S. small businesses, Plaid is looking to support the SMB financing process for both traditional and alternative financiers. The company recently announced the development of a new solution designed to accelerate PPP lending by unlocking small businesses’ payroll data to more quickly assess a borrower’s eligibility for financing.

While Plaid announced the new product before PayPal and Square secured approval to issue PPP loans, Plaid said that both companies showed interest in the solution, as have payroll providers including ADP and Gusto, according to CNBC reports.

Visa Invests in Open Banking FinTech Railsbank

Open banking startup Railsbank, founded by Currencycloud Founder Nigel Verdon, secured some high-profile funding with the recent investment by Visa, according to recent reports. The investment comes as Railsbank also announced a five-year partnership with Visa to accelerate its banking-as-a-service operations across Southeast Asia. Railsbank is looking to become a utility for its bank and FinTech clients, enabling these firms to accelerate the launch of their own financial products and services.

Visa also added Railsbank to its FinTech Fast-Track Program, enabling Railsback to access Visa’s partner network and technologies to more efficiently launch Visa products within Railsbank FI and FinTech clients in the region, said reports.

Funding Options Unlocks Data Across 20 Lenders

Online lending broker Funding Options has struck an open banking agreement to source data from 20 alternative lending companies that will now have the ability to source banking data more efficiently for their own lending operations. Participating alt-lenders including iwoca, Just Cashf Flow, YouLend and several others.

Borrowers will be able to share their data with Funding Options via API, which can then be accessed by the participating alternative finance companies. According to reports, the initiative is the result of Funding Options’ recent collaboration with AccountScore, which developed the API to facilitate data aggregation and sharing under U.K. open banking regulations.

Funding Options cited the need for alt-lenders to more efficiently finance SMBs across the U.K. to help ease financial burdens related to coronavirus.