// TECH TRENDS //
NOT-SO-OPEN BANKING FAILS BUSINESSES THAT DARE TO DREAM BEYOND THEIR BORDERS
Companies of all sizes can now trade overseas as the online world has removed barriers to cross-border trade . But although the online world has charged ahead , the banking industry has failed to keep up . Martynas Bieliauskas , CEO at Klarpay AG , discusses how the open banking revolution has stalled and is failing to provide customers , particularly SMEs , true access to international transactions and services .
VEN THE SMALLEST digital
E business is now a potential multinational . Whether it ’ s a vintage clothes retailer trading on Depop or a digital creative selling through a self-built website , customers can come from anywhere in the world . That was always the promise of the online revolution – to supercharge globalisation by removing the barriers to crossborder trade . So why , given that these benefits have been a reality for decades , has the banking industry failed to follow suit and support digital businesses with easy , affordable and fast international payments ?
For all the talk about open banking , financial services remain a walled garden . If all your customers are domestic , fine . But if a small- or medium-sized enterprise has even the most modest global ambitions – if they want to trade with customers and suppliers in Mexico as easily as with those in Milton Keynes , for example – the traditional banking industry leaves them high and dry . For all but the biggest billion-dollar companies , cross-border payments remain slow , cumbersome and so expensive that fees and charges can end up costing more than the value of the sale .
The biggest failure of open banking is its continued inability to deliver truly democratic international banking services . This does incalculable damage to SMEs , preventing businesses from achieving their growth ambitions by strangling their ability to trade outside their home country . But it ’ s also bad news for the whole business community , as well as their customers . Freezing smaller businesses out of international trade damages competitiveness ; it tilts the playing field even further towards big business , entrenching their monopolies and restricting consumer choice .
14 Intelligent SME . tech