Corporates begin to embrace open banking
Most open-banking solutions introduced to date have been focused on retail users, but the pandemic is driving demand from corporates for new application initiatives.
When regulators developed the principles of open banking and the revised Payment Services Directive (PSD2), their primary intention was to encourage innovation and drive greater competition, so that consumers and small businesses could access a wider range of financial services.
However, open-banking application developers have not ignored the corporate sector. Various companies have introduced solutions in areas such as treasury management, managed IT services, and digital receipts and invoicing.
The complexity of corporate accounts… could explain the slower take-up by this sector
Nevertheless, corporates have been slow to adopt open-banking applications, due to limited innovation within large treasury departments and a reluctance to move away from tried-and-trusted solutions.
PSD2 gives businesses as well as consumers a right to access their payment account data.
“However, the complexity of corporate accounts – and the existence of legacy systems for managing these accounts – could explain the slower take-up by this sector,” says Jack Wilson, TrueLayer’s head of policy and regulatory affairs.
Encouragingly, research commissioned by Finastra in August found that almost three in four banks in the Americas, Asia-Pacific, Europe and MEA had seen an increase in the integration of corporate banking application programming interfaces (APIs) since the outbreak of Covid-19.