Beyond The US, Open Banking Goes Beyond The Consumer

There may not be an Open Banking mandate in the U.S., but that doesn’t mean the payments and financial services market isn’t embracing data sharing and integration.

The Clearing House took a significant step toward advancing the U.S.’ adoption of an Open Banking framework this week, announcing an initiative aimed at connecting FinTech firms to users’ financial data — in a data sharing agreement between The Clearing House, its 25 financial institution owners and FinTech firms. According to reports, banks are looking for alternatives to the traditional data aggregation tactic of screen scraping, which requires users of financial services platforms to provide their usernames and passwords to their online banking accounts to share financial information with that platform.

In a statement, The Clearing House Executive Vice President of Product Development and Management Dave Fortney said that this strategy may have security implications, because once financial data leaves the bank, it is held by that FinTech, and “it’s really their responsibility to protect it. They’re the only ones that have control over that information at that point.”

According to reports, The Clearing House is still holding discussions about how to protect consumer data once it leaves a financial services provider, and who is liable in the case of a data breach. A proposed agreement would place liability on the recipients of consumer data in the case of a hack.

The business model in the U.S. has largely focused on how to improve consumer-facing financial services and products. Yet, outside the U.S., the latest agreements and product releases in the B2B world are showing how Open Banking can have a similarly profound impact on corporate and small business banking and financial services, too. PYMNTS looks at some new collaborations between banks and FinTech firms below.

Tide Integrates With QuickBooks

U.K. challenger bank Tide is integrating with small business accounting platform QuickBooks Online for a more seamless connection between bank data and accounting data. In an announcement on Tuesday (Nov. 12), Tide said the data integration will save small business owners time, while promoting accuracy and efficiency in how they aggregate financial data for accounting and analysis.

“Open Banking is an easier way to move, manage and share financial data,” Tide said in its announcement, adding that the integration will provide real-time visibility into payments, expenses and cash balances using data from users’ Tide bank accounts.

The integration comes just days after Revolut for Business announced a similar QuickBooks Online integration.

Soldo Connects With NatWest

Another U.K. B2B FinTech, Soldo, announced a data integration with NatWest, allowing U.K. businesses to connect their bank account data directly into Soldo’s business spend management platform. Soldo said it is partnering with NatWest’s Rapid Cash offering. This will not only allow business users to connect their bank data into the Soldo platform, but allow small businesses to access NatWest’s line-of-credit offering, provided by Rapid Cash, from within the Soldo platform to finance their Soldo accounts.

To facilitate this connection, Soldo announced its application programming interface (API), which also connects the Soldo platform with businesses’ other back-office platforms, including accounting, ERP, procurement and expense management portals. These integrations, Soldo VP of Small Business Europe Darren Upson said, “will give businesses and their accountants even greater control and visibility over every aspect of their finances.”

VoPay Embraces Open Banking In Canada

In an effort to support small business payment acceptance in Canada, VoPay announced a suite of APIs and other tools, designed to integrate small business customers’ bank accounts to accept payments directly from those accounts without compromising security.

VoPay said its data integration service is now offered for business clients of major Canadian banks, including Bank of Montreal, with a focus on reducing the time and cost of accepting and processing payments. The APIs support automated bank account authentication at the time of a transaction, supporting direct bank account payments as an option at checkout.