As an SME lender, you’ve likely experienced the operational headaches that come with trying to scale a lending business in a manual, fragmented environment:
Applications grind to a halt as your team chases bank statements, tax returns, and other supporting documents, often across multiple channels, systems, and formats. Each back-and-forth creates friction and delay.
Risk teams are bogged down manually reviewing PDFs and spreadsheets, trying to piece together a coherent picture of a borrower’s financial health. It’s slow, error-prone work, and a poor use of skilled analyst time.
You’re forced to make decisions with incomplete information. Traditional documents offer a static, outdated view of cash flow. That makes it hard to assess affordability accurately, especially for businesses with irregular income or seasonal fluctuations.
Drop-offs during onboarding are common, especially among time-poor business owners. Every extra form to fill, every document to upload, increases the chance they’ll give up and look elsewhere.
The result of these operational inefficiencies is longer decision cycles, higher operational costs, and lost deals.
Open banking promises to solve these problems by providing you with access to live transaction data directly from your customers’ bank accounts. Your teams can gain a clearer view of income, outgoings, and affordability, enabling faster decisions and more accurate assessments with less operational effort.
The result is a far smoother credit journey for your customers and a more scalable process for your team.
But how do you actually get started, and what should you know before embedding open banking into your credit journey? Let’s take a closer look.
Ready to discover how open banking can help you lend faster, fairer, and more profitably? Book a demo with one of our experts today.
The challenges for SME lenders (and how open banking can help)
As an SME lender, you’re under pressure to make faster, fairer decisions, keep costs down, and scale into new markets: all while offering a smooth digital experience. Here are the main problems you’re likely facing and how open banking can help.
1. Manual, outdated data vs real-time financial visibility
The challenge
When lending decisions rely on PDFs and uploaded statements, your team is stuck manually extracting and reviewing data. It’s slow, resource-heavy, and often out of date by the time you see it. That:
Adds friction to every application
Pushes up operational costs
Limits visibility into affordability, spending behaviour, and income patterns
How open banking helps
Open banking gives you secure, consented access to an SME’s business bank account via API. Instead of static snapshots, you see:
Revenue and cash flow patterns over time, including seasonal fluctuations
Fixed and variable outgoings like payroll, rent, and suppliers
Day-to-day liquidity and how the business actually manages money
That means you can assess affordability in context and make faster, more consistent decisions: without adding headcount or chasing paperwork.
2. Multi-day settlement cycles vs near-instant, predictable payments
The challenge
Traditional repayment methods like Direct Debit and cards are often slow to settle, prone to failure, and expensive to manage. Repayments typically follow multi-day settlement cycles, especially around weekends and bank holidays, so a repayment initiated on Friday might not fully settle until after the weekend.
If there aren’t sufficient funds, you only find out after the payment has failed and the scheme or acquirer sends a response. By then, your team is chasing repayments, reprocessing them, and trying to reconcile delayed funds against the correct loan account. That drives up admin costs, creates cash flow uncertainty, and makes it harder to manage portfolio risk in real time.
How open banking helps
With open banking payments (Pay by Bank) and Variable Recurring Payments (VRPs), SMEs repay via secure bank transfers authorised directly in their banking app.
Instead of waiting on card or Direct Debit cycles, you get a faster, cleaner repayment flow with a few key advantages:
Instant settlement: Funds clear immediately, without relying on BACS cycles.
Fewer failures: VRPs can automate top-ups, reducing missed or late payments.
Lower admin overhead: Fewer failures mean simpler reconciliation and less time spent chasing arrears.
Built-in trust and security: No card details to store, and every payment is strongly authenticated in the customer’s banking app.
You get faster cash flow, clearer visibility, and a more resilient repayment process.
3. Friction at repayment setup vs embedded, branded journeys
The challenge
You have approved the loan, and the SME is ready to proceed, but then they hit a clunky repayment setup process that involves:
Manually entering card details
Being redirected to unfamiliar third-party portals
Extra steps that feel disjointed from your core journey
For asset finance or larger-ticket lending, this friction raises trust concerns and often slows down the process.
SMEs may call your team to check that the process is genuine, hesitate before completing setup, or put it off until later. In competitive situations, some will use the delay to compare alternatives.
How open banking helps
Open banking lets you embed both data sharing and payment setup directly in your own digital journey:
SMEs connect their bank and authorise payments within your branded interface
There is no need to jump between platforms or re-key sensitive information
Repayment setup becomes a single, guided step at the end of the application flow
The result is faster disbursement, fewer support requests, and a frictionless experience.
Why SME lenders are choosing Yapily
Your choice of an open banking provider isn't just a vendor decision: it's a strategic partnership that influences your product performance, customer satisfaction, and your ability to scale for the long haul.
SME lenders trust Yapily because we go beyond basic features to offer comprehensive infrastructure, actionable insights, and industry-aligned expertise.
The right partner should not only meet your technical requirements but also genuinely understand your industry, co-develop new solutions with you, and evolve alongside your future plans, ensuring long-term alignment with your business roadmap.
When you partner with Yapily, you get:
1. Full access to both data and payments on a single platform, so you can underwrite, disburse, and collect faster
Most providers focus on just one part of the lending journey, either helping you access customer account data or enabling payments. Yapily gives you both.
This means you can:
Verify affordability and cash flow in real time
Disburse funds quickly and securely via direct bank payments
Collect repayments efficiently, with fewer failures and lower costs
We support one of the widest coverage networks in Europe, with connections to nearly 2,000 banks and financial institutions in 19 countries. That includes core markets like the UK, Germany, France, and the Netherlands, so you can serve SME clients locally or expand into new regions without added complexity.
Whether your team is evaluating a working capital loan, assessing a short-term cash injection, or managing repayments for asset finance, Yapily provides everything you need in a single integration, streamlining operations and reducing the time it takes to make a decision.
2. Clear, consistent insights with the stability you need
SME financial data can be messy and inconsistent. Yapily can normalises and enriches it automatically, so you get structured, reliable insights you can trust.
As a lender, this helps you:
Quickly identify cash flow gaps or revenue trends
Flag early warning signs like declining reserves or irregular spending
Spot recurring expenses, such as payroll, supplier payments, or tax liabilities
As a result, you make more accurate affordability assessments and confident lending decisions.
3. A team that knows lending and helps you scale with confidence
Yapily understands the challenges of SME lending and provides the tools, support, and scale to help you grow with confidence. We work with our lenders hands-on to optimise the lending journey and support growth.
Some of the key ways we do this are by:
Designing high-converting onboarding flows: Ensuring a smooth, user-friendly data connection process that reduces drop-off
Supporting integrations and technical setup: Helping your developers with implementation, testing, and performance tuning
Support on implementation and best practices related to PSD2 and SCA requirements: From meeting the Revised Payment Services Directive (PSD2) and Strong Customer Authentication (SCA ) security requirements, to using enriched open banking data to improve your credit models
Our transaction categorisation feature gives you a complete view of an SME’s operational cash flow. You can easily distinguish recurring supplier payments, VAT outflows, retained earnings, and incoming client payments, giving you the detail you need to assess creditworthiness and affordability in real-world conditions.
Case study: How Yapily helps Allica Bank simplify account top-ups for UK SMEs
Allica Bank is a digital bank focused on serving UK SMEs with tailored business accounts and relationship banking.
Before partnering with Yapily, account top-ups were a common source of frustration for their customers, requiring manual transfers, logging into separate banking apps, and waiting for funds to clear.
With Yapily, Allica Bank transformed that experience:
In-app account top-ups: Customers can now fund their accounts directly within the Allica app, no redirects or extra steps required
Fewer errors, less admin: No more manual entry of payment details means fewer mistakes and less time spent fixing them
Faster access to funds: With faster payments enabled through open banking, SMEs get their money sooner, improving cash flow.
Boosted security and trust: Embedded bank-grade connections reduce fraud risk and reinforce confidence in the process
By powering their top-up flow, Yapily has made a once-painful process effortless, helping SMEs move faster and manage cash flow with ease.
Read more about our partnership with Allica Bank
Partner with Yapily to enable frictionless SME lending
SME lending is evolving. With open banking, you can unlock real-time data, streamline risk assessment, and transform how funds are approved, moved, and repaid. Yapily gives you the end-to-end infrastructure to lead the change.
From automating onboarding to powering intelligent repayments, we help you build lending journeys that scale with speed, precision, and confidence, so you’re always one step ahead of what your client’s business needs next.
Ready to get started with open banking for better lending? Speak to one of our experts at Yapily today.
FAQs: Open banking for SME lenders
1. What is open banking for SME lenders?
Open banking lets you access SME bank account data and initiate payments via secure APIs, with the customer’s consent. It replaces static, document-based processes with live data and embedded payments.
2. How does open banking improve SME credit decisions?
You can see real transaction histories, cash flow patterns, and recurring expenses across accounts, not just a few PDFs. That helps you assess affordability more accurately and say “yes” with more confidence.
3. How does open banking help with loan repayments and collections?
Pay by Bank and Variable Recurring Payments (VRPs) enable instant, account-to-account repayments that settle quickly and fail less often than cards or Direct Debit. This gives you more predictable cash flow and less manual chasing.
4. Is open banking secure enough for lending use cases?
Yes. Open banking is regulated, uses strong customer authentication and encrypted APIs, and lenders never see or store customer credentials. Providers must be authorised and regularly audited.
5. What should SME lenders look for in an open banking provider like Yapily?
Look for strong bank coverage in your markets, support for both data and payments, robust data normalisation and categorisation, and proven lending use cases. A partner such as Yapily also offers hands-on integration support.