Research conducted by the Competition and Markets Authority (CMA) reveals that the pandemic has led to a significant rise in the number of small firms that have adopted open banking.
The research study, called the Small Business Financial Landscape, saw the CMA speak to 500 firms that employ fewer than 50 people. The results show that half of them have adopted open banking, and that the pandemic was a major contributory factor to this increase. Close to three out of five said that they had begun using open banking services during the last six months, and 90% stated that the pandemic was the specific reason for them deciding to do so.
When it comes to the actual services that small firms have opted for, 24% indicated that cloud accounting for managing invoices and financial records online was the main choice, and 21% told the CMA that they were now employing systems for forecasting their future cashflow situations.
Furthermore, 41% stated that cloud accounting had cut the amount of admin work they had to do, with 27% saying that the cashflow prediction software had given them a clearer understanding of their businesses. For business owners who are less comfortable with such online tools, an accountant for small business in Goole or anywhere else they are located will be able to help with these issues.
Constanza Castro Feijoo from the Open Banking Implementation Entity told Peer2Peer Finance News that it was great to see more small firms in the UK realising the benefits of open banking.