Open finance is a system that connects all your financial data, including banking, loans, invoices, payroll, and insurance, through secure technology, allowing you to see the whole picture in one place. Instead of juggling five different platforms, open finance gives you a single dashboard that helps you spot trends, make decisions faster, and unlock opportunities you might otherwise miss.
I have been a banker for decades, and I have witnessed small businesses navigate inflation, rising interest rates, labor shortages, and cyber threats. The old, siloed way of managing money does not cut it anymore. Small business owners deserve tools that make finance less of a guessing game and more of a growth engine, and open finance is the clearest path I have seen yet.
Key takeaways:
- What is open finance? It is the secure sharing of financial data across banking, loans, payments, payroll, insurance, and more, giving small businesses a complete picture in one place.
- Why it matters now: Inflation, high borrowing costs, and rising cyber threats are squeezing small businesses in 2025, making smarter financial tools more essential than ever.
- How it helps: Open finance streamlines money management, accelerates access to credit, reduces payment costs, and provides real-time insights for informed decision-making.
- The bottom line: Instead of managing finances in silos, small businesses can use open finance to unlock efficiency, improve resilience, and grow with confidence.
Navigating today’s turbulent financial landscape
Let’s face it. Running a small business today is tougher than ever. The pressures of 2024 and 2025 have tested even the most resilient entrepreneurs.
| Challenge area | Key statistic |
|---|---|
| Inflation | 48% of small businesses said inflation was their top concern in mid‑2025, down from 58% in the previous quarter. (US Chamber) |
| High borrowing costs | Banks held the federal funds rate steady at 4.25%–4.50% in early 2025, meaning borrowing remained costly for small firms. Rapid Business Plans |
| Cybersecurity risks | In 2025, the average cost of a small business data breach was approximately $164,000. SQ Magazine |
Inflation
The cost of everything, from supplies to rent to utilities, has increased. Even small price increases eat into already thin margins, forcing many owners to cut expenses or raise prices, both of which can feel like losing battles.
High borrowing costs
Borrowing has become more expensive, and access to affordable credit remains a significant challenge. For many businesses, loan payments now take a larger bite out of profits than they did in the past, leaving less room to invest or expand.
Supply chain headaches
From shipping delays to unpredictable pricing, supply chain problems continue to disrupt daily operations. For some owners, this means being unable to deliver to customers on time, while for others, it means incurring extra costs they never planned for.
The labor market tightrope
Finding and retaining skilled workers remains one of the most challenging tasks for a small business owner. High turnover and rising wages make it difficult to plan ahead, and many businesses are struggling to do more with fewer staff members.
Cybersecurity risks
As more businesses move online, the greater their exposure to cyber threats becomes. Many small businesses worry that a single breach could be devastating, but they often lack the time and resources to implement strong protections.
In the midst of all these challenges, one theme stands out: most small businesses lack a clear, connected financial picture that helps them adapt quickly and make informed decisions.
Tip: When everything feels uncertain, focus on what you can control. Start by pulling your financial information into one place. This could be as simple as linking your bank account to your accounting software. The clearer your picture, the quicker you can react to rising costs, cash flow swings, or unexpected disruptions.
Why traditional banking isn’t enough anymore
In today’s environment, relying on conventional, fragmented financial tools puts small businesses at a real disadvantage. I have seen too many owners slowed down, not because they lacked determination, but because their financial tools were never designed for the complexity they face today.
| Challenge with traditional banking | What it looks like in practice |
|---|---|
| Fragmented view | Data spread across banks, accounting software, and payment systems makes cash flow forecasting slow and prone to errors. |
| Slow access to credit | Long loan applications and delayed approvals limit your ability to act quickly on opportunities. |
| Payment inefficiencies | Manual invoicing, reconciliation, and managing multiple platforms consume valuable staff time. |
| Missed optimization | Idle funds, tax deductions, and global payment savings are often overlooked without integrated insights. |
Blurred financial vision
When your accounts, loans, and payments live in separate places, it’s almost impossible to see the full picture. Forecasting cash flow or identifying spending patterns becomes guesswork, and manual reporting only increases the likelihood of mistakes.
Slow access to credit
Obtaining a loan still requires a substantial amount of paperwork and a lengthy approval process. Even if your business is healthy, fragmented data can make you appear riskier than you actually are. By the time everything is verified, the opportunity may have passed.
Inefficient payment processes
Invoices, bill payments, and reconciliations take far too much time. With different platforms handling different pieces, owners often feel like bookkeepers instead of leaders.
Missed opportunities for growth
Without a connected financial view, businesses miss out on optimizing idle cash, managing international payments effectively, and capturing all the deductions they are entitled to. Those missed chances can add up to real money left on the table.
Modern business has outgrown the traditional banking approach. What small businesses need now is a more innovative, more connected approach.
Ushering in the era of open finance
This is where open finance steps in. Open finance builds on open banking, which primarily focuses on bank accounts and payments, but it extends much further. It allows you to securely share a wide range of financial data, including loans, insurance, pensions, and investments, with trusted providers. The goal is straightforward: to give you more control, greater insight, and additional opportunities to grow your business.
What is open finance, really?
Think of open finance as creating a common language for all your money. Currently, every bank, credit card company, and insurer speaks its own language. Open finance uses secure connections called APIs to translate those languages into one, but only when you give permission. That means you decide who sees what and for how long.
Here’s what open finance covers in practice:
- Extended data scope: Goes beyond basic bank accounts to include investments, loans, mortgages, pensions, and insurance.
- Enhanced connectivity: Securely links your different financial tools and platforms.
- Business owner control: Gives you the authority to determine who can access your information and why.
How it works
At its core, open finance runs on two principles:
- Your consent: Nothing is shared unless you approve it. You choose the data, the provider, and the time frame, and you can revoke access at any time.
- Secure APIs: Once consent is given, financial institutions utilize secure APIs, or digital bridges, to share information safely. These bridges are protected with strong encryption and strict authentication.
Guiding principles of open finance
Open finance is built on ideas that directly benefit business owners.
- Access and sharing: You have the right to access and share your financial data securely.
- Control: You remain in charge of your information at all times.
- Transparency: You gain a clearer view of your spending, debts, and assets across all your accounts.
- Innovation: By breaking down silos, open finance encourages banks and fintechs to build new tools that meet your needs.
- Inclusion: It helps expand financial services to more people and businesses, opening doors to credit and support that might have been previously out of reach.
How open finance empowers small businesses
The true promise of open finance is not in the technology itself, but in the way it frees small business owners from the headaches of scattered systems and guesswork. Connecting your financial world into one secure view gives you sharper insights, faster access to credit, smoother payments, and personalized services that actually fit the way you work.
| Cash flow visibility | See all your accounts and transactions in one real-time dashboard. |
| Access to credit | Faster, fairer loan approvals based on actual financial health. |
| Payments | Quicker settlements, lower fees, and simpler reconciliation. |
| Automation | Bookkeeping, expense tracking, and tax prep that run in the background. |
| Personalization | Banking and fintech tools tailored to your industry, size, and goals. |
Smarter access to capital
One of the most valuable benefits of open finance is its improvement in access to credit. By securely sharing a complete picture of your finances, lenders can make quicker and fairer decisions. That means less red tape for you and more opportunities to grow.
Here’s how it helps:
- Faster loan approvals: With your permission, lenders can see accurate, up-to-date financial data. This speeds up applications, reduces paperwork, and helps you access funds when you need them most.
- Personalized lending products: A full financial snapshot allows lenders to tailor loans to your situation. Even if your business has limited credit history, you can still qualify for products with terms that make sense for you.
- Alternative credit scoring: For newer businesses, real-time data such as cash flow or customer payments can support creditworthiness, opening doors that traditional models might otherwise keep closed.
Streamlined payments and cost savings
Open finance is also changing the way small businesses send and receive money. Connecting payment systems directly to your bank makes transactions faster, cheaper, and easier to manage.
- Reduced transaction fees: Secure account-to-account payments reduce the costs typically associated with credit card processing. For businesses with thin margins or high transaction volumes, those savings add up quickly.
- Faster settlement: Direct bank transfers mean money lands in your account sooner, improving cash flow and reducing the stress of waiting on late payments.
- Automated invoicing and bill pay: Open finance platforms can generate invoices, send reminders, and reconcile payments with just a click, freeing you from hours of admin work.
- International payment efficiency: For global operations, open finance makes it easier to hold multi-currency accounts, transfer funds at better exchange rates, and manage international cash flow.
Automated financial management and tax-ready solutions
One of the most significant advantages of open finance is the time it saves on day-to-day financial tasks. By connecting your accounts and tools, it can handle much of the heavy lifting in the background, allowing you to stay focused on running your business.
- Automated bookkeeping: Link your accounts directly to your accounting software, such as QuickBooks or Xero, and let the system categorize expenses, capture receipts, and generate reports in real time.
- Simplified tax preparation: Many open finance tools automatically track withholdings, update your tax bill in real time, and flag potential deductions so you are always prepared when tax season arrives.
- Optimized business savings: Sweeping features can automatically transfer idle funds into higher-yield savings or money market accounts, helping you earn more without lifting a finger.
Personalized services for your unique business
One of the things I appreciate most about open finance is how it makes financial services feel less generic and more personal. When you give consent to share a complete picture of your business finances, banks and fintechs can actually design solutions around your needs instead of offering one-size-fits-all products.
That might mean lending options tailored to your industry, savings tools that align with your growth stage, or payment solutions that cater to the way your customers prefer to make purchases. The result is a financial partner that understands your business as it is today and supports where you want to take it tomorrow.
Provider spotlight: Your partners in the open finance journey
Several forward-thinking banks and fintech companies are already leveraging open finance to support small businesses. Here are a few examples of how they stand out:
- Mercury: A digital-first bank that makes it easy for startups and small businesses to connect their checking, savings, and treasury tools in one place.
- U.S. Bank: A traditional institution that has leaned into open finance by partnering with fintechs, allowing customers to connect their accounts to thousands of apps securely.
- Novo: A business banking platform built for entrepreneurs that integrates directly with popular tools like Stripe, Shopify, and QuickBooks.
- Found: Designed for freelancers and the self-employed, Found combines banking with built-in invoicing and automated tax withholding.
- Airwallex: A global platform that helps businesses manage cross-border payments, multi-currency accounts, and foreign exchange with ease.
Mercury
Mercury is a digital-first banking platform built primarily for startups and small businesses. It provides checking and savings accounts with no monthly fees or minimum balances, along with tools that help businesses manage cash, streamline payments, and integrate easily with accounting software.
Why I chose it
I like Mercury because it makes banking simple without stripping away the features that matter to growing businesses. The ability to earn interest on idle cash through Mercury Treasury is especially valuable, and the free wires and ACH transfers help keep costs down. For small business owners seeking flexibility, low fees, and modern integrations, Mercury offers a strong option.
U.S. Bank
U.S. Bank is a traditional financial institution that has embraced open finance through partnerships with fintechs. It enables secure connections to thousands of third-party applications, providing business owners with a way to view, analyze, and manage their finances with greater transparency. It also offers a full range of accounts, treasury services, and business credit cards.
Why I chose it
I chose U.S. Bank because it shows how a legacy institution can adapt to the open finance era. With its size and reputation, U.S. Bank brings credibility, while its API-powered connections enable small businesses to modernize without compromising the trust associated with a traditional bank.
Novo
Novo is a digital banking platform designed for freelancers, entrepreneurs, and small businesses. It offers a no-fee business checking account, a budgeting feature called “Reserves,” and direct integrations with tools like Stripe, Shopify, and QuickBooks.
Why I chose it
Novo stands out for its focus on entrepreneurs who value integrations and simplicity. I like it because it doesn’t overwhelm you with fees or complexity, and the Reserves feature makes it easier to set aside money for taxes, payroll, or future growth.
Found
Found is a business banking platform built with freelancers and self-employed in mind. It combines checking with invoicing, tax tracking, and even automatic tax withholding. It also issues a business debit card and supports virtual cards for flexible spending.
Why I chose it
I included Found because many small business owners I’ve met wear multiple hats, and Found is designed for exactly that reality. Its built-in invoicing and tax features reduce stress, and its focus on freelancers and independent workers makes it uniquely valuable for a segment often overlooked by traditional banks.
Airwallex
Airwallex is a global financial platform that specializes in cross-border payments. It helps businesses open multi-currency accounts, transfer funds internationally at favorable exchange rates, and issue multi-currency corporate cards.
Why I chose it
I chose Airwallex because global transactions are becoming increasingly common, even among smaller businesses. I have seen firsthand how currency conversions and fees eat into profits, and Airwallex provides a smarter, more cost-effective way to handle international payments.
Practical advice for embracing open finance
Open finance can feel like a significant leap, but getting started doesn’t have to be overwhelming. The key is to start with manageable steps and build upon them. Here are a few ways to approach it:
- Start small, think big: Do not try to overhaul everything at once. Begin by connecting one or two financial tools. For example, link your business checking account to your accounting software through an open finance platform. Once you see the benefits, you can expand your reach.
- Prioritize security: Ensure that any provider you work with adheres to strict security practices. Look for strong encryption, multi-factor authentication, and clear data privacy policies. Remember, you are always in control and should be able to revoke access at any time.
- Do your due diligence: Research each provider carefully. Review their fee structures, integration options, and customer support. It also helps to read feedback from other small business owners.
- Integrate thoughtfully: Think about how your tools work together. Connecting your banking with invoicing and payment systems can create a more powerful ecosystem for managing cash flow.
Frequently asked questions (FAQs)
What is the difference between open banking and open finance?
Open banking is a subset of open finance. Open banking focuses mainly on bank accounts and payment transactions. Open finance takes it a step further by encompassing investments, pensions, mortgages, and insurance, providing a comprehensive view of your financial health.
Is open finance secure for my business?
Yes. Security is at the core of open finance. Data sharing occurs only with your consent, and it’s facilitated through secure connections called APIs that utilize encryption and strong authentication. Reputable providers, whether banks or fintechs, invest heavily in cybersecurity to keep your information safe. Always make sure you are working with authorized and trusted providers.
How do I get started with open finance?
Begin by focusing on one of your biggest financial challenges, such as managing cash flow, improving credit access, or tracking expenses. Then, research providers that offer open finance solutions designed to meet that need. Most platforms make it simple to connect your accounts securely once you give your consent.
