How open banking is driving efficiency for finance teams

As businesses embrace the growth possibilities of online customer transactions, finance teams can struggle to keep up with the added workload. The complexity of large-scale invoicing, payment processing, and manual steps like refunds can make workloads untenable, putting pressure on leaders to find simpler solutions.

All of this adds up. A third of all invoices require some degree of manual work from finance teams, per a recent report by Medius. This additional workload is directly linked to the fact that nearly three-quarters (71%) of UK finance workers are on the hunt for another job.

It’s clear that if leaders are to ensure their finance teams remain intact and up to the task of handling growing customer payments, they need to streamline the systems used for financial transactions.

Open banking is the answer to many of these challenges, as the simplest solution to reducing paperwork for IT and finance teams surrounding customer payments. It enables customer payments to be facilitated via secure APIs which connect a customer’s bank to that of a vendor or merchant for near-instant transactions.

Businesses that use open banking save more than 150 hours per year on finance tasks, as well as £1,687 on payment processes. That’s according to data collected by OnePoll on behalf of Payit by NatWest, which surveyed 150 business leaders from medium-to-large businesses within the UK (those with in excess of £2 million in revenue per year).

Payit™ by NatWest, the bank’s own service for payments and processing rooted in open banking frameworks, reduces the strain on finance teams by linking to customers directly and securely and generating automatic proof of sales data.

This means finance teams have less compliance work to do, on top of the streamlined aspects of their day-to-day duties.

Faster payments, faster refunds

Payit™ by NatWest also uses the Faster Payments Service, which reduces the time between customers sending money and businesses receiving them. With BACS transactions, funds can take up to three days to move from one account to another, whereas with the Faster Payments Service, this process happens almost instantaneously¹.

This allows finance teams to keep track of business gains and outgoings in real-time, as well as close ongoing transactions quicker to reduce the overall strain on finance teams. The same is true for refunds, which can be processed either instantly¹ or next working day² through Payit™ compared to the days-long process teams have to oversee using older payment systems.

First and foremost, this helps finance teams to deliver an industry-leading customer service experience, particularly when it comes to resolving discrepancies. This allows businesses to maintain relationships with customers that could otherwise sour in the days-long wait for large refunds to be processed.

This quick turnaround time also allows finance teams to quickly move on to other pressing issues rather than spend an undue amount of time checking on outgoing payments hours or even days after they were first requested.

Along the same lines, Payit™ by NatWest supports the open banking variable recurring payments instruction. This allows for customers to set up regular payments in a secure alternative to standing orders or direct debits.

Finance teams can rely on this function to close transactions faster and more reliably, without the need to process forms manually. This also reduces the need to loop in compliance teams, formerly necessary when keeping customer information on file in order to collect payments at regular intervals.

Combined with the real-time payment processing that open banking affords, variable recurring payments help finance teams track the health of their enterprise in better detail, with up-to-date overviews of cash flow.

Future-proofing your finance processes

With regulators such as the European Commission and the UK’s Competition and Markets Authority (CMA) having compelled banks to follow certain open banking standards, open banking has become the clear future for modern payment systems.

The promise of open banking for finance teams in the near future is significant and opens businesses up to customers they haven’t previously reached. On the other side of the equation, customers can securely pay for services and set up subscriptions without needing to surrender their personal information and with the only necessity being a valid UK bank account.

As enterprises become more used to open banking, they leverage insights from this growing customer cohort to inform other efficiency-improving changes across their workflow. For example, firms can create real-time models of customer payments using data pulled from Payit™, which can be plugged into data analytics solutions. This can provide suggestions on the most active times for customer spending, areas that teams at present may underserve, or those that are overprovisioned.

This will help finance teams to deliver on business goals while making the customer experience easier and more enjoyable. With real-time cash flow insights and streamlined refund processes, finance teams can focus on the most important tasks enabling them to spend more time improving the financial performance of their business.

As these benefits filter through to enterprises, organizations will be able to use Payit™ by NatWest as their trusted route to open banking value. Finance teams that make the most of these improvements will begin to stand out from the rest, giving their firms a competitive edge.

_{1 In the majority of cases, payment will be near-instantaneous thanks to the Faster Payments Service. However, banks may retain certain payments for additional checks. If approved, payments are guaranteed to arrive within 2 hours.}

_{2 If actioned before 6.30pm}