Subscribe to our newsletter

Open your practice up to tech-led banking

The Open Banking revolution is under way. Rachel Willcox investigates its aim to streamline financial services, and how accountants can help consumers take better control of their funds.

Open your practice up to tech-led banking
smsfadviser logo
  • Contributed by Rachel Willcox
  • April 04, 2019
share this article

When, two and a half years ago, the Competition and Markets Authority (CMA) published its final report of a two-year investigation into retail banking, it confi rmed what many SMEs had long suspected: established high street banks did not have to work hard enough for customers’ business, many people were paying more than they should, and consumers were failing to benefit from new services.

Since then, a wide-reaching package of reforms has emerged – designed to boost competition and accelerate innovation to the UK retail banking sector. Central to that reform was the stipulation that banks, initially the nine largest current account providers, must implement Open Banking by early 2018, based on a common set of technical standards.

Open Banking’s USP

The aim of Open Banking is to enable personal customers and small businesses to share banking data securely with other banks and third parties, allowing them to manage accounts with multiple providers through a single digital app, take control of funds, better manage cash fl ow and compare products on the basis of their own requirements.

Sam O’Connor is co-founder and CEO of Coconut, a current account for freelancers and self-employed people that keeps track of expenses and how much tax you owe. Coconut will introduce Open Banking functionality in the first half of this year. Cloud accounting packages and traditional bank accounts haven’t kept pace with the mobile and fast-paced nature of work, O’Connor says.

“By combining accounts and using intelligence, we can give SMEs and owner-managed businesses a full picture of their financial position,” O’Connor explains. “Our customers want to manage their business fi nances in one place with minimal effort.”

O’Connor is bullish about the impact Open Banking will have on the SME market. “I think it will create the biggest shift in how we manage money this century, because it will enable the people who specialise in creating value or saving time for business to do what they do using the data, and allow banks to focus on regulated lending.”

From banking to bookkeeping

Equally keen to take on the establishment is Tim Fouracre, founder and CEO at Countingup, a business bank account with automated bookkeeping. Boasting 9,000 customers since its launch last January, Countingup charges £4.95 a month for a mobile-only account that offers invoicing, automated categorisation of transactions, P&L reports and the ability to attach receipts. A web-based version will launch later this year.

“As you make a transaction it gets categorised immediately and automatically,” Fouracre explains. “We believe it’s better to have accounting and banking integrated. You use one app, you pay one supplier and it’s more automated and a simpler way to run your business.”

The appetite among the millennial generation to turn to apps to fulfill their financial needs is strong, and MTD will boost the appeal of bookkeeping automation, Fouracre says.  

Less grunt, more profit

For accountants, the efficiency gains promised by Open Banking could be significant, with real-time access to bank information. This should reduce manual grunt work and offer advisers

the opportunity to increase margins by servicing higher numbers of clients, or by focusing on lucrative value-adding services.  

“A bugbear from accountants is accessing not just information from clients, but good information from clients,” says Elaine Clark, managing director of online accountancy practice, which has tied its colours to the Coconut mast and is helping the company to develop a portal for accountants in practice.

“Open Banking is a gamechanger for accountants,” says Carl Reader, serial entrepreneur, chairman of business advisory fi rm d&t and author of bestselling business book The Startup Coach. “With immediate access to in-depth data, accountants can transition from being the trusted bean-counter to a true replacement for the sorely missed high street bank manager, advising their clients on future cashflow and funding requirements.”

Although a sharp rise in the number of new fintech start-ups entering the market during the past year is keeping incumbent high street banks on their toes, the numbers at play aren’t yet significant enough to be any real cause for concern. But with 64% of banking customers around the world predicted to take advantage of the Open Banking initiative by 2022, according to research by PwC, Open Banking is already part of the accountancy landscape – like it or not. The challenge will be for those firms that go against embracing that change.


1 BUD This app analyses  transactional data and uses machine learning to highlight where users spend, how they can save and which financial services might be relevant for them.

2 CLEARSCORE Uses Open Banking to provide users with greater visibility of their finances, blending their credit history with their current spending habits to suggest the right credit products for them.

3 MONEYBOX This mobile app,  launched in 2016, helps people round up their everyday purchases to the nearest pound and invest the spare change into simple tracker funds. Open Banking will allow a direct integration for round-ups.


Hans Tesselaar is an executive director at BIAN, the Banking Industry Architecture Network, a global not-for-profit network made up of banks, technology providers, consultants, and academics.

“I would say there’s reluctance, rather than resistance, on the part of banks to embrace Open Banking. You could describe Open Banking as allowing third parties to do banking activities, which could be a threat. But it’s also allowing banks to collaborate with third parties to offer additional services.

“There is huge potential for everyone in the arena to increase their service and product offerings. Transaction prices will lower and consumers will benefit, but I don’t think that they will defect to challenger banks.”

Rachel Willcox is a freelance journalist

Receive the latest Financial Accountant news,
opinion and features direct to your inbox.

related articles