Unlocking open banking data’s potential to lift small business

Market uncertainty and increased costs continue to challenge small businesses, and many will rely on extended credit lines and loans to weather the current environment and grow their businesses. Today, Mastercard is announcing that it has added advanced analytics to its Open Banking platform delivered by its subsidiary, Finicity in the U.S. These analytics can help lenders manage their risk profiles while also adding diverse and inclusive credit models for small business loans as well as ongoing monitoring and expansion of credit card lines.

“Small businesses are increasingly looking for greater choice in how they borrow, pay and manage their finances,” said Jess Turner, Mastercard’s Executive Vice President for Global Open Banking and API. “Open Banking provides lenders the owner-permissioned data and advanced analytics they need to offer more choice in financial services to small businesses, which are the backbone of the American economy.”

According to Mastercard’s Rise of Open Banking Small Business Report, 85% of small business owners are looking for more choices that deliver faster and easier access to capital. And, according to the Federal Reserve bank’s Small Business Credit Survey1 , the share of small business applicants receiving all the traditional funding they sought fell from 51% in 2019 to 36% in 2020 to 30% in 2021.

Innovating with our partners

Now, more than ever, having a digital presence is critical. Mastercard has helped small businesses open their digital doors, as well as relying on Mastercard for support to pay and get paid with confidence for decades.

When small business owners give permission to access their financial data via open banking, lenders can leverage our Mastercard APIs to apply rich cash flow, balance and payment history analytics to transactions, extracting valuable insights such as small business’ liquidity, revenue, balance, cash flow, and risk of loan repayment default.

“Responsible lending is the key to growth for many small-and medium-sized businesses,” said Silvana Hernandez, Executive Vice President, Product and Engineering, North America, Mastercard. “Mastercard open banking provides permissioned access to data that fuels new and improved financial experiences for small businesses.”

Partnering with fintech innovators 1-800Accountant, Amount, Codat, Enigma, Nav and Rho as well as former Mastercard Start Path companies GenEQTY, Lendio and upSWOT, Mastercard open banking helps expand choices in financial experiences in lending & credit decisioning, secure account opening, account-based payments and business financial management. 

What they’re saying

• “As an organization which provides technology-based solutions to give small businesses access to world-class accounting, data is the backbone of what we do. By leveraging Mastercard Open Banking Data, we can streamline processes and create smooth customer experiences.” - Ryan Teeples, CTO of 1-800Accountant
• “The ongoing industry shift towards embracing open banking infrastructure has enormous potential to improve the banking experience for consumers and small business owners. We’re excited to team up with Mastercard to accelerate progress– ultimately unlocking better data, faster decisioning, and cost of credit reduction industry wide.” - Adam Hughes, CEO of Amount
• "When a small business goes through a credit application, they typically need to provide additional financial statements as well bank statements, so Open Banking is only one part of the equation. The exciting thing about this partnership is that it enables SMB lenders to fully digitize their credit application and processing, so that providers and small businesses alike can benefit from a faster, more efficient process with greater visibility." - Pete Lord, CEO & Co-founder of Codat
• “Enigma’s rich data about the financial health and operations of U.S. small businesses has already unlocked new paths for small business financing. We are now building next-generation analytics on top of open banking to provide an even more complete view of a business, enabling more accurate and inclusive risk management.” - Hicham Oudghiri, CEO of Enigma 
• “We’ve always worked with a lens toward expanding financial access. By delivering data-driven insights and tools, we can empower providers to meet the financial needs of a broader range of business clients with scale and efficiency, to improve financial performance, business health, and capital access for more SMBs.” - Dionne Gumbs, CEO & Founder, GenEQTY
• “As a startup in the financial technology industry, we can count on Mastercard providing the operational and compliance excellence that helps us eliminate financial hurdles and introduce small business owners to capital opportunities they may not know exist.” Mark Cottle, EVP, Partnerships, Lendio
  
• “With Mastercard Open Banking, Nav helps business owners avoid painful rejections and wasted time by showing them a comprehensive view of their financial health, customized financial recommendations and streamlined processes using the same data lenders and credit issuers use “- Greg Ott, CEO of Nav
• "Rho utilizes Mastercard’s Open Banking APIs to support real-time credit underwriting for small and mid-sized businesses across categories,” said Everett Cook, CEO & co-founder, Rho
• “Deep expertise in serving small and mid-sized businesses as well as understanding their main challenges around cash flow management and efficient decision-making, allows us to meet the crucial needs of this segment. Our technology is focused on delivering a truly unique embedded business management experience wrapped in three lines of code only making SMBs not just survivors, but champions in their industries.” - Dmitry Norenki, CEO of upSWOT
  

¹ Source: Small Business Credit Survey, Federal Reserve Banks.