Open Banking has been the darling topic of the financial sector since the introduction of PSD2. However, Open Banking does not only concern lending institutions, banks and FinTechs. The financial services industry is also increasingly making use of the new possibilities afforded by API banking. The following three examples of typical B2B use cases show how a functioning interface with access to account data helps to overcome concrete challenges in financial processes.
1. The Digital Account Check for Purchase Financing
The example: Vaitrade offers digital, automated purchase financing for business customers. Their promise is fast and uncomplicated product financing with a repayment period of up to six months after purchase.
The challenge: How do I evaluate the legal capacity of a customer?
You only want to conclude contracts with companies that are creditworthy. That’s why you request a lot of financial information and evaluations on the financial situation of your customer, which they have to upload manually. As a result, however, the process does suffer greatly in terms of duration, costs and customer experience.
The solution: The Digital Account Check on one or more business accounts replaces the multitude of paper-based steps. Using a banking API, PSD2-certified Account Information Services (AIS) have access to the relevant information on the customer’s online account. In the next step, the AIS aggregates and categorises the transactions of the business accounts.
The result is in no way inferior to a profit and loss statement in terms of scope and quality! You receive an already prepared overview with all relevant information. Your business customer will be pleased about the digitalised application and the short processing time.
2. Categorised Account View for Factoring
The example: Finiata finances a large number of self-employed workers, freelancers and SMEs. By using a readily available API, the company enables uncomplicated, automated data transfer without additional implementation or programming costs.
The challenge: How do I check whether the invoice is genuine or fake?
You repeatedly have to struggle with fake invoices issued by the business customer. You no longer want to purchase invoices that are not the result of a genuine receivable.
The solution: Thanks to Open Banking and the Digital Account Check, it is possible to gain a complete financial overview of the business customer’s revenue history. Via an interface to the customer’s business account (a banking API), a fully automated transmission of information on the customer’s payment history is achieved.
Account Information Service Providers (AISP) not only provide all the relevant information via the banking API; they also categorise them in such a way that they are directly available to the factor in edited form. This categorisation provides the factoring company with exactly what it needs to know: whether a certain receivable actually exists.
Open Banking – Probably THE word of the year for all who deal with finances. Discover what is behind this term.
3. Open Banking for Accounting Providers
The example: Providers of accounting applications such as debitoor offer digital financial accounting. This simplifies proper accounting for business people by bundling all functions in one programme.
The challenge: How do I record invoice receipts on business accounts?
The solution: Using a banking API, not only the online accounts, but also all process steps for the business customer can be integrated into the accounting programme. The technical connection enables business customers to connect their bank account with the accounting provider’s software in an easy and direct way. Incoming and outgoing payments are automatically balanced and all incoming invoices are recorded.
As part of the Digital Account Check, AISPs even provide a complete, categorised representation of a P&L statement in the in-house system. It is no longer necessary for the customer to log into the business account or for the AISP to have a separate input mask.