For UK small and medium sized businesses, open banking tools have quietly turned old school banking into something closer to an API. Instead of logging into clunky portals and downloading CSV files, founders are wiring their bank data directly into dashboards, cashflow models and accounting platforms.

What are open banking tools for SMEs?
At a basic level, open banking tools let a business connect its bank accounts securely to other software. With the business’s permission, these apps can read transactions in near real time and in some cases initiate payments. For UK SMEs juggling multiple accounts, cards and payment providers, that single data pipe is becoming the financial nervous system of the company.
In practice, this means less time on manual admin and more time interrogating graphs. Instead of reconciling statements on a Friday afternoon, owners can open one dashboard and see all balances, incoming payments, upcoming bills and tax liabilities in one place.
Cashflow forecasting with open banking tools
Cashflow has always been the thing that keeps UK founders awake at 3am. Open banking tools are making it more predictable. By plugging live transaction feeds into forecasting software, businesses can build rolling cashflow views that update automatically.
Typical features include:
- Daily updated cash positions across all bank accounts
- Automatic categorisation of income and spend to show trends
- Scenario modelling for best, base and worst case revenue
- Alerts when projected balances are about to go negative
The nerdy part is the modelling. Some tools allow you to tag invoices and subscriptions, then predict when they will actually be paid based on past behaviour. Others plug into sales platforms so your pipeline feeds straight into cashflow forecasts. For finance teams that love a spreadsheet, this is essentially a live data feed replacing endless copy and paste.
Smarter lending decisions for UK SMEs
Lenders are also leaning heavily on open banking tools. Instead of asking for PDFs of bank statements and waiting days for underwriters, many UK SME lenders now request consent to connect directly to your accounts. The software analyses income stability, seasonality, average balances and existing commitments in minutes.
For businesses, this can mean:
- Faster decisions on working capital loans and overdrafts
- Credit limits that flex with real time performance
- More nuanced assessments for newer businesses without long trading histories
It is not magic – if your numbers are weak, the decision will still be no – but the experience is far closer to connecting a new app than applying for a traditional bank loan. The data extraction is automated, and the risk models are built on actual transaction behaviour rather than static snapshots.
Accounting automation and nerdy dashboards
Accounting software has arguably been the biggest winner from open banking tools. Bank feeds now sync multiple times a day, transactions auto match to invoices and rules learn how you categorise spend over time.
For the spreadsheet obsessed, the fun really starts with integrations. Common setups include:
- Bank feeds into accounting software, then into a custom reporting tool such as Power BI or Looker Studio
- Webhook style alerts into Slack or Teams when large payments land or key bills are paid
- APIs feeding into internal dashboards that combine financial data with website traffic, ad spend and operational metrics
The result is a single screen where a founder can see today’s bank balance, this month’s profit, ad performance and support ticket volume. Traditional banking portals simply are not built for that kind of joined up view.
How this compares with traditional banking
Traditional banking was designed around branches and statements. Data was locked away in PDFs and monthly exports. these solutions flip that on its head by treating financial data as something that should flow wherever the business needs it, securely and with clear consent.
Key differences include:
- Frequency: from monthly statements to near real time data
- Format: from static documents to structured transaction feeds
- Control: from bank centric portals to business centric dashboards
This does not replace banks, but it does change their role. For many SMEs, the bank is now the secure vault and regulated infrastructure, while the day to day experience is delivered by a layer of specialist apps on top.


Open banking tools FAQs
Are open banking tools safe for UK small businesses to use?
In the UK, regulated open banking tools must comply with strict security and data protection rules. Access to your bank is granted through secure authentication rather than sharing passwords, and you can revoke permissions at any time. The bigger risks usually come from weak internal controls, such as shared logins or not removing access when staff leave, so it is important to manage user permissions carefully.
How can open banking tools improve cashflow management for SMEs?
By connecting your bank accounts directly to forecasting software and accounting platforms, open banking based tools can update cash positions automatically, categorise income and expenses, and flag upcoming shortfalls. This removes a lot of manual reconciliation and gives owners a rolling, data driven view of cashflow instead of relying on static spreadsheets or end of month reports.
Do I need a new bank account to use open banking tools?
Most major UK business banks already support open banking connections, so you can usually plug in existing accounts without moving provider. The key step is choosing compatible apps for forecasting, accounting or reporting, then granting them permission to access your transaction data. It is worth checking both your bank and any prospective tools for compatibility before you commit to a new setup.






















