Independent innovation charity Nesta has announced details of a £2.5m prize fund for the second stage of its Open Up Challenge.
The competition, launched as part of the Competition and Markets Authority’s (CMA) open banking reforms, will see technology startups compete for grants of up £200,000 to deliver innovative new financial products for small business owners.
In line with the CMA’s open banking reforms, the challenge is seeking fintech solutions that will promote competition.
According to Nesta, products will be considered that “help small businesses save time and money, find better services, reduce stress and discover the intelligence in their financial data”.
Applications are now open online, and will close on 4 May 2018.
Fintech entrepreneurs will be able to apply for one of three prize streams, and are not needed to have participated in the first round of Open Up Challenge.
Business Current Account (BCA) Track
Solutions that will (at a minimum) help small businesses navigate the market for business current accounts. This service could be embedded in a wider product.
Solutions that will (at a minimum) help small businesses navigate the market for unsecured loans of less than £25k. This service could be embedded in a wider product.
New Frontiers Track
Next-generation products and services that will create substantial value for small businesses and strengthen competition.
“With real-time, permissioned access to small businesses’ account transaction data now enabled by open banking, there is an unprecedented opportunity to re-think financial services for small businesses,” Nesta said.
Once applications have been considered in June, an independent judging panel will award grants of £100,000 to enable ten to 12 finalists to develop their products. Half of those teams will win a prize of at least £200,000 in November.
Commenting on the fund’s launch, Chris Gorst, challenge prize lead at Nesta, said open banking had become “a reality”, with entrepreneurs already innovating.
“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 now available to them.
“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. This is good news for small businesses.”
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