The economic downturn has certainly thrown businesses a curveball. According to our latest report, an overwhelming 94% of businesses have had to rethink and adjust their processes to cope. How? Almost half are cutting expenses.

But cutting expenses doesn’t have to mean stifling innovation. Because open banking has entered the chat…

New research shows 77% of fintechs believe open banking is relevant for their business. And over 600,000 businesses already use open banking to power their products. Like Juni, who build personalised credit lines to protect businesses from debt, or Crezco, who offer quicker and more convenient checkout solutions to help businesses get paid faster.

Wondering how open banking could benefit your business? Keep reading to find out…

Streamline financial operations

Using spreadsheets to record finances; reconciling paper documents; manually entering and processing payroll. These are all important financial tasks, but they take up a lot of time.

Open banking makes financial operations seamless by automating tasks that usually require manual entry, like payroll. One example is Comma, who has helped finance teams save around 77% of the time they usually spend each month processing bulk payments.

And there’s more. Open banking provides insight into your financial data, so you can make better-informed decisions based on your financial performance, cash flow position, and risk exposure. The result? Improved profitability and a higher return on investment.

Unlock new revenue streams

Open banking is all about building innovative financial products and services. By leveraging open banking to power your product innovation, you can attract new customers and (bonus!) stand out from the competition.

But it’s not just about finding new customers. Open banking also unlocks new markets and revenue-generating opportunities, like…

• Partnering with financial institutions to expand into new verticals
• Tailoring products and services to your existing customers’ needs
• Offering value-add options to your existing offering

Scale revenue with customer experience

As we said, don’t forget about your existing customers. Why? Because there’s revenue in retention. In fact, a new customer can cost five times more than an existing one.

But what does that look like in practice?

1. For lenders… access to data is automated and customers only have to re-consent every 180 days. Parameters can be set up to trigger alerts that can lead to proactive discussions, so customers won’t fall behind on their payments.

2. For digital banking… customers can combine their bank accounts and centralise their financial data in one place. Rather than flicking between multiple accounts, they can easily check their spending, balances, savings (and more) from one dashboard.

3. For payment services… the checkout experience is seamless since customers don’t have to enter their card details. What’s more, access to data can be used to personalise reward schemes and foster customer loyalty.

Looking for more examples? Here are 20 open banking use cases to know.

Improve cost management

Businesses are losing a staggering £301bn every year to poor cost management. And senior finance teams are spending 51% of their time on admin tasks that could be digitised… that’s over 350,000 hours a day. Could your team be one of them?

Open banking simplifies spend management with real-time transaction tracking to get the most out of every penny spent, and…

• Negotiate better deals with suppliers
• Improve cashflow forecasting
• Monitor employee spending

And finally, emerge from the downturn stronger

History is a great teacher. When we look back, we often see companies that thrived during tough economic times did so by innovating. Netflix is an excellent example of this.

Back in the 2008 recession, Netflix wasn’t the huge media giant it is today. In fact, it had only just launched its streaming service to rival VHS and video stores. To boost its presence, Netflix partnered with enterprises like Xbox, so people could stream through their devices. As other companies struggled to generate revenue, Netflix grew exponentially.

What can we learn from this? Simple, innovation + collaboration = opportunity.

It’s the same with Direct Debit and Variable Recurring Payments. Enabled by open banking, Variable Recurring Payments (VRP) is the Netflix to Direct Debit’s dusty VHS player. It’s still a recurring method… but much better suited to today’s businesses and consumers: cheaper, quicker, and more flexible. Our VP of Payments talks more about it in this article.

To recap…

You’ve got to break ground to endure a tough economy. From building innovative products and unlocking revenue to automating tasks and improving cost management, open banking offers a powerful set of capabilities that can help your business emerge stronger.

Need to convince your executives that open banking is worth the company’s investment? Check out this blog on how to build a compelling business case. And if you’re exploring your options, download our ultimate checklist to choose the best open banking provider.