In a bid to counter account switching fatigue, Tide is opening access to its suite of business banking tools to SMEs who hold accounts with other banks.
Starting today, Tide will give business owners the opportunity to connect their third party business bank account to Tide to access Cashflow Insights, a product that predicts a business’s future cash flow, using data from their business bank account.
Over time, Tide will extend the service offering to products ranging from invoicing, to expense management, payroll and credit services.
Oliver Prill, Tide CEO, says: “Tide is a business financial platform. On the platform, businesses have a choice between using Tide or partner label products. Now we are extending this concept to current accounts. We are all about serving small businesses optimally making sure that all products work seamlessly together, not about forcing SMEs into a Tide label product.”
The initiative is intended to attract businesses who are traditionally deterred from the hassle of switching accounts or hold accounts with multiple financial institutions.
Surveys regularly report that around 13% of businesses look to switch banks within 12 months, yet in practice only an estimated 4% actually switch per annum, due to the high demand business owners have on their time and the complexity of informing business partners of new bank details.
"We reached the conclusion that the only material way competition can be introduced for the established businesses is to allow them to virtually switch to use the Tide platform without actually switching bank accounts,” Prill explains. “This involves linking their existing bank account into the Tide platform via open banking to access our full range of finance & admin services."
Tide’s Open Access move is sponsored by a £25 million award from the RBS Alternative Remedies Fund Pool E, which is intended to inject a dose of competition into the business banking market.
“Businesses will not only be able to use services such as invoicing, but, in time, open banking will also allow them to view and make payments on their existing bank account via the Tide platform," says Prill. "As such, this will not only introduce much needed competition into the established SME segment, but will also provide the most powerful boost to open banking for SMEs to date.”
Prill says Tide has set a target of serving 100,000 businesses with third party bank accounts by end 2022.