Open Banking held back by lack of trust among small firms on second anniversary of roll-out

Press Releases 10 Jan 2020

FSB comments on the two-year anniversary of the Second Payment Services Directive.

  • Lack of appetite for financial data sharing laid bare by new Federation of Small Businesses (FSB) figures
  • Majority of business owners ‘wary’ about sharing banking data electronically, with small proportion currently doing so    
  • FSB calls on government, banks and incoming Financial Conduct Authority (FCA) boss to cement benefits of Open Banking with targeted awareness campaign

With today marking two years since the implementation of the Second Payment Services Directive (PSD2) in the UK, new FSB figures highlight the minimal impact of the legislation to date.

PSD2 paved the way for Open Banking – a set of interfaces which give consumers and business owners the option to seamlessly share financial information with other banks, finance providers and trusted third parties. Doing so effectively should help to assist better cashflow management, the securing of improved deals on financial products and services, and reduction of recurring costs, such as utilities.   

A new FSB survey of more than 1,000 members finds that fewer than one in seven (15%) small firms are currently sharing their business bank account data electronically with third parties. A big share (87%) do so to update accountancy software.   

Around two thirds (65%) of small firms say they would not consider sharing their banking data with other financial services providers electronically. Among this subsection of firms, four in ten (43%) believe that sharing banking data in this way is unsafe, while a similar proportion (37%) are ‘unsure about the benefits’ of such activity.

The overwhelming majority (85%) of smaller business owners who would not consider sharing their business bank account data with other financial services providers electronically are ‘wary’ about doing so.    

FSB National Chairman Mike Cherry said: “We’re two years on from the introduction of Open Banking but very few small firms have reaped any benefit from it.

“We’ve always said that – done right – the benefits of Open Banking will be huge. Giving small businesses the ability to integrate cashflow, invoice, payroll, utilities and tax data in one place means giving them the ability to identify new efficiencies. And by sharing that big picture with trusted experts, gains should be amplified.  

“However, the financial crash casts a long shadow. A lot of small business owners still don’t trust lenders to do the right thing.

“This was always going to be a hard sell – one moment we business owners are told to do all we can to protect sensitive data, the next we’re being told it’s safe to dish it out.    

“We need to see a concerted effort from the government, banks and the FCA to ensure that Open Banking application programming interfaces are absolutely watertight, and small business owners are fully aware of the benefits of using them. Key to this is awareness-raising, and clarity around who is responsible for cybersecurity breaches and protections for smaller firms.  

“The incoming head of the FCA should make this a top priority for their tenure. There’s still time yet for a small business banking revolution.”


Note to Editors
1) FSB surveyed 1,002 members between 15 November and 4 December 2019. It will be publishing a full report on the small business banking landscape later this year.
2) Full FSB Open Banking recommendations can be accessed here.

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About FSB

As the UK’s largest business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed.

FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.