After a two-year long inquiry, the latest report by the Competition and Markets Authority (CMA) has encouraged Britain’s high street banks to launch what it has labelled a technological “revolution”, and speed up the introduction of innovations to promote greater competition.
As part of its planned open banking programme, the CMA has called on Britain’s lenders to make it possible to share customers’ data via new apps, enabling customers to more easily compare bank prices and standards, tackling some of the challenges small business owners face when dealing with banks.
To mark the reforms announced by the CMA, Business Advice has taken a closer look at some of the innovations already introduced by Britain’s lenders in recent years, designed to make banking more straightforward for small business owners.
Voice biometric technology
Keeping tabs on multiple pin numbers, passwords, dates and authentication details, required to gain access to various accounts, is a challenge most small business owners can easily do without when dealing with their bank.
Banking services are now accessed via telephone, the internet or apps, meaning individuals are expected to remember different details to access accounts via a growing list of platforms.
To get around this, some lenders have introduced voice biometric technology – providing business customers with secure access to call centres by verifying a person’s identity from the sound and tone of their voice.
At the start of a call with their bank, the voice biometric technology checks a customers’ voice against stored “voiceprints”, sending a verification result to the bank’s call operator, allowing them (or not allowing them) to provide secure information and complete a transaction.
Barclays, HSBC and First Direct are some of the banks to have brought in voice biometric technology in the UK so far in 2016.
Touch biometric technology
Similar to voice biometric technology in that is doesn’t require customers to keep track of various passwords, dates and details, touch biometric technology verifies banking transactions by taking an individual’s fingerprint.
Touch identification is available via most new smartphones, and business customers are generally required to download a bank’s app to make use of the technology.
Having introduced touch biometric technology last year, Royal Bank of Scotland has hailed it as a “huge success”, and now has more than one million personal and business banking customers logging into accounts and making transactions with their fingerprint.
Innovative challenger banks
Alongside the innovative technologies introduced by major high street lenders has been the rise of new lenders offering a completely innovative type of banking experience to small business.
Launched in the UK a year ago, Mondo is a startup bank that exclusively offers its services to customers via smartphones.
Created to be the Google or Facebook of banking, with accounts that are as easily-used by customers as email, Mondo’s CEO Tom Blomfield recently told Bloomberg: “We are targeting a demographic that values being able to do everything over a mobile phone in five seconds”.
Mondo is not the only innovative, digital-only challenger bank to be gaining traction in the UK and offering something different to small business.
With the Bank of England opening the way for new banks to more easily enter the market, and with the government backing initiatives to make London a “fintech” hub, the years since the 2008 financial crises has seen the rise of new lenders like Atom, Tandem and Starling.
Bitcoin and Blockchain technology
Digital currency bitcoin – and the blockchain technology that verifies it – has been hailed as the next global innovation with the potential to revolutionise the world of finance.
With huge implications for small businesses, bitcoin and blockchain make possible a world where secure payments are no longer required to be made with cash or by card, but can be seamlessly integrated into a connected network of devices and online platforms.
Earlier this year, Santander was the first UK bank to introduce blockchain technology – enabling individuals to make international payments of between £10 and £10,000 via a new app that bypasses centrally-held bank accounts. Payments are not subject to transfer fees and yet can be sent to 21 different countries.
Santander’s head of innovation Sigga Sigurdardottir said of the technology: “Blockchain will play a transformational role in the way we achieve our goals and better serve our customers, adding value by creating more choice and convenience”.
Small business banking customers are increasingly able to make payments via wearable tech, such as smart watches, wristbands, or even stickers attached to the back of mobiles.
In 2016, Barclays introduced three “wearable” enabling customers to pay at 300,000 locations across Britain, including on London’s tubes and buses, while Nationwide have been the first high street lender to launch an app on the new Apple Watch.
Read on to find out to find out the CMA’s suggested reforms to make the banking industry more competitive and fair for small businesses.
Sign up to our newsletter to get the latest from Business Advice.