Westpac NZ’s new open data partnership to slash SME lending times

Westpac NZ has teamed with accounting specialist fintech, Common Ledger, leveraging open data capabilities to pull relevant business data from its SaaS-based accounting platforms, making it easier for the bank to receive and assess Kiwi small business loan applications.

Under new open data arrangements, SME loan applications can be completed in “as little as five minutes”, Westpac said.

Through the partnership, businesses applying for loans worth between $50,000 and $1 million will be able to send relevant data directly from their business accounting software to Westpac using Common Ledger’s CreditScout lending platform.

Common Ledger, founded in 2013, connects data from a number of popular accounting platforms (including MYOB, Equifax and Xero), “enriching” and “standardising” it into a format that can be integrated into business systems, the company says.

Common Ledger chief executive Carlos Chambers noted that accounting information pulled from software is “securely delivered to the bank” where it is structured using Common Ledger’s machine learning engine and “packaged into insights presented to lenders”.

“The goal is to present the information customers want to share and lenders need to see in a workflow that’s super easy to use – removing time and effort and accelerating the flow of capital to customers,” Chambers said.

From here, Westpac’s business banking team can review the application based on a holistic view of customers’ financials, as well as the bank’s regular credit procedures.

Westpac NZ’s institutional and business banking chief Simon Power said: “What’s exciting about this partnership is we’re empowering our business customers to participate in the open data economy and make use of their digital and portable data.”

Common Ledger’s Chambers mused that even in “the age of Application Program Interface (API) and data portability” SME data was still largely “locked up” and “under-used by both business owners and established bank lenders.”

While Common Ledger works with all major accounting software providers, Westpac’s new data-sharing service is currently only available for SME clientele using accounting platform MYOB.

Notably, this is not Westpac NZ’s first open data fintech initiative; in October 2020 the bank partnered with sustainable spending app CoGo, while in December the bank invested in consumer Open Banking fintech, Akahu.

Meanwhile, rival lender ANZ NZ last month announced a partnership with UK fintech Bud to similarly streamline lending processes, using information from bank statements on income and expenses.

On the Open Banking front, NZ’s Ministry of Business, Innovation and Employment commenced consultation on the development of a cross-industry data portability regime, or a Consumer Data Right, similar to Australia’s scheme.