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Nesta challenge leverages Open Banking to help small businesses
Innovation foundation invites enterprises of all sizes to compete for a share of a £2.5m prize fund in the second phase of its Open Up Challenge
Innovation foundation Nesta is offering companies with Open Banking knowhow a share of a £2.5m prize fund to support the development of financial technology (fintech) products and services aimed at small and medium-sized enterprises (SMEs).
The first phase of its Open Up Challenge took place in February 2017, and enterprises of any size are now being invited to submit products and services that could help SMEs manage their money better. The closing date for applications is 4 May 2018.
Applications are being accepted in several product categories that are geared towards making it easier for SMEs to compare banking products from multiple banks, including business current account types and the availability of unsecured loans of less than £25,000.
The third category is billed as an “open call” for products and services, built using Open Banking principles, also aimed at SMEs.
The Open Banking initiative, introduced in January this year by the Competition and Markets Authority, allows third parties – with the user’s consent – to access consumers’ banking transactional data.
“Open Banking is becoming a reality and we have already started to see fintechs build tools and services that will impact the way small businesses discover, access and use core financial products and services,” said Chris Gorst, challenge prize lead at Nesta.
“The next phase of the Challenge builds on this by encouraging these innovators to develop solutions that will enable small businesses to better navigate the market and compare the products and services available to them.”
Read more on Open Banking
- Open Banking could add an extra £1bn to the UK economy, according to the Centre for Economics and Business Research.
- Crealogix research finds that 85% of consumers are unaware of the meaning of Open Banking or the effect it will have on them.
In June, judges will reward 10 to 12 of the best contestants with a grant of £100,000 each to develop their service, and in November, five or six finalists will each receive an extra £200,000.
Twenty companies competed last year, each receiving £50,000 and the top 10 receiving a further £100,000. Nesta expects most of the 2017 contests to apply again, plus a new selection.
“It was evident from the first phase of the Challenge that there is an abundance of pent-up innovation ready to come to market and Open Banking has the potential to radically reduce the barriers for these new products to emerge,” said Gorst.