Tide and Coconut leverage open banking to save "time and money" for self-employed

SME challenger Tide and Coconut have inked a deal that leverages the benefits of open banking which the two fintechs say will save "time" and "money" for the self-employed and accountants.

The partnership builds on Tide’s Open Access service introduced last year, which opened its services to non-account holders, allowing small and medium-sized businesses to connect their existing bank accounts to its platform.

The deal with Coconut, a tax and accounting app which helps accountants manage sole trader clients, means that the self-employed who open a Tide business bank account can connect their Tide accounts to Coconut through open banking.

The benefits of this are that they will have access to tailored software to help them, for example, with finance admin and quarterly tax returns.

Sam O’Connor, founder of Coconut said: “Whilst we would always encourage sole traders to have a business bank account like Tide, and that’s why we’re partnering, many don’t do that yet. 

“Coconut works just as well if you use a business account as if you use a personal account. So you can get started today and we grow with you as you get more formalised as a business.”

The fintechs believe that combing their specialisms, Tide’s business banking services for SMEs and Coconut’s expertise in supporting sole traders with accounting obligations, will prove a hit with accountants and sole traders.

Through Coconut’s app, accountants can get quick access to their clients’ accounting information, so they can spend less time chasing paperwork. 

For example, sole traders often have transactions across a range of different accounts and the Coconut app makes it easier to gather the data and simplify their finances. 

Last year, Coconut stopped opening new current accounts and instead doubled down on bank statement feeds through open banking.

Coconut launched a new app as part of its open banking pivot to capitalise on being a banking hub, meaning any freelancer could use Coconut, regardless of existing banking arrangements.

O’Connor added: “Our focus is on accounting and tax tools, regardless of where people bank, so it makes sense for us to focus on this, and leave the banking to others, like Tide.”

Earlier this year, Tide said 1,000 business customers have signed up for its Open Access service within just a few weeks, topping expectations.

Some analysts heralded the move as a potential game-changer for open banking.