Fintech Tide turns to open banking to entice new SME customers

Tide open banking Image credit: Tide

Tide, a London-based mobile-first bank for small and medium-sized enterprises (SMEs), is using open banking to allow businesses to connect existing accounts with its financial services platform.

It means customers at Starling Bank, Natwest, and Barclays can try Tide without switching banks and gain access to Tide’s financial tools such as accounting systems.

Founded in 2015, Tide has over 375,000 SME customers with over 400,000 business accounts.

Tide aims to tempt 100,000 businesses with its open banking-powered third party bank accounts by the end of 2022.

The company offers a range of banking-related services and a suite of administrative solutions, such as full integration with accounting systems.

“With established businesses generally not switching banking providers or having multiple banking providers, we concluded 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,” said Oliver Prill, CEO, Tide. “This involves linking their existing bank account into the Tide platform via open banking to access our full range of finance & admin services.”

Tide said it will gradually open up its platform to offer access to more features.

From now, business owners have the opportunity to connect their third-party business bank account to Tide to access Tide Cashflow Insights. 

The UK fintech company plans to scale its Open Access offering giving business owners the ability to connect to Tide and use products ranging from invoicing to expense management, payroll, and credit services.

Tide has raised around £146m in funding from major backers. They include Anthemis, Apax, Augmentum, Creandum, Goodwater, Jigsaw, Latitude, LocalGlobe, Passion Capital, SpeedInvest, SBI and Tencent.

Tide open banking: “More competition, more choice”

The Open Banking directive was introduced by the UK government in 2018 in a bid to increase competition in the banking sector. It allows banking data to be shared with third parties, such as a consumer giving a money management app access to their primary banking account.  

Kevin Hollinrake MP, co-chair of the All-Party Parliamentary Group on Fair Business Banking, said: “Giving businesses access to a wider range of time-saving, productivity-enhancing services without the hassle of changing banks is very big news and a ground-breaking innovation for business banking. More competition means more choice, better service, and lower fees for businesses, and we very much welcome this revolutionary approach.”