The IDE, a finance app for business, is set to attempt a major change in the market by opening up its services to non-account holders.
The fintech firm, established in 2015, is set to encourage all small and medium-sized firms to link their existing bank accounts with its platform. This means Barclays or NatWest customers, for example, can try the Tide offer without switching banks.
Some analysts say this could prove to be a game-changer for open banking. Rivals note that Tide does not have its own banking license, relying on partner ClearBank for this.
Governments and regulators have been trying to increase competition in the business banking market for years, with limited success.
He thinks new players without legacy IT issues may be the way forward.
Kevin Hollinrek, Co-Chair of the All Party Parliamentary Group on Fair Business Banking, said: “Giving businesses access to a wide range of time-saving, productivity-enhancing services without the hassle of changing banks is great news and a groundbreaking Hai-Breaking Innovation for Business Banking.”
Tide serves 375,000 SMEs, which is about 7% of the market. But customers’ reluctance to change bank accounts – some statistics say people are more likely to divorce than to change banks – has been an impediment to growth.
Tide CEO Oliver Prill said: “With established businesses not typically switching banking providers or having multiple banking providers, we came to the conclusion that the only physical way for established businesses is to introduce competition so that to allow them to virtually switch to using the Tide platform without actually switching bank accounts.”
Starting today, business owners have the opportunity to link their third-party business bank account to Tide to access Tide Cashflow Insights.
There is considerable doubt among bank analysts that “challenging” banks will ever break the hold of the big players – Barclays, Lloyds, NatWest, HSBC and Santander.
The tide hasn’t always found the watchdog’s side.
It has been criticized by British Business Bank for failing to offer some government repayment options on Covid loans.