Open banking allows small businesses to provide permissioned access to financial data held at financial institutions, helping them to expand their access to credit because there’s so much more data that can be looked at.”
Lack of capital is one of the primary reasons small businesses fail—a reality made more daunting by a tightening credit market and slow-moving lending processes that can bury applicants in paperwork.
Businesses that stumble during this process don’t have much to fall back on; the median small business has only 27 days of cash on hand.
Enter open banking. Third-party providers of credit—like banks and fintechs—are leveraging the tech to enable small businesses to easily and safely share their banking information, paving the way for a faster, easier and fairer lending process. Explore how below.
By Richard Sine | Illustrations By Studio Ianus
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GINGER SIEGEL
North America Small Business Lead, Mastercard