2023 is upon us already and it seems relentless with each year bringing new challenges. Running a business is hard enough and my goodness they deserve a break. With an unpredictable economic outlook, business owners are feeling battered and bruised. They wake up every day with hope that today is going to be better than yesterday. And why shouldn’t they? They’ve earned it.

I believe that in least one way, there is scope for positivity, but the industry truly needs to step up and unlock value for their customers. Businesses are going into 2023, much richer than they have ever been before. They may not have cash rattling around but businesses are data rich. Richer than most possibly realise.

The world’s accumulation of data is a fairly recent phenomenon. 90% of the world’s data was generated in the last two years and the trend is here to stay with 2.5 quintillion bytes being created every day. As data generation continues to ratchet up, there is an opportunity for SMEs and lenders to use their own rich seam of data to push back against the economic gloom and leverage it to create both intrinsic value and the business benefits of data exchange for a better product or service.

For the financial services industry, technology is the open sesame to harnessing customers’ data and using it to deliver a better service, increased support and more creative, flexible products. Open banking provides access to live transactional data in real time, allowing lenders to review, at a keystroke, how a customer is faring. It can reveal where the business’s pressure points are today, predict the potential hurdles coming up the track as well as identify timely opportunities. Open accounting data provides internal access to the financial heartbeat and management of the business. For the SME customer, sharing its up-to-the-minute transactional and management accounts data with a lender, gives it power. It provides leverage for better terms, more support, more understanding.

An additional advantage for banks who are accessing and analysing customer data across its client portfolio, is the ability to provide individual customers with an array of critical insights. Benchmarking against their industry peers, enabling them to take the right action in the right areas.  For instance, a bank with an SME haulage customer may be able to demonstrate how they compare against higher performing businesses in the same industry, businesses with the same size of fleet, salary burden and customer profile. Data sharing means that the bank and the SME can work together to determine how to achieve better results across these cost areas. Support like this in tough times forges trust and lasting relationships.

The other significant area where data exchange is poised to deliver benefits to both lenders and businesses of all sizes, is sustainability. Banks are already building carbon calculators and offering preferential loans to borrowers who are actively trying to reduce their carbon footprint. How do lenders and SMEs know they are making progress? Data sharing can provide banks and SMEs with the comfort that they are tracking positively against their goals and commitments which strengthens the relationship between the SME and the lender.

Here at Validis, we are continuing to develop the technology that allows SMEs and lenders to accrue business benefit from the richness of owned data. We are confident that this will be the year in which the value of data and the power of data exchange secures its place at the heart of both the financial services industry and the powerhouse of the world’s SME community.