Bank account aggregation: Why it's a game-changer for businesses

As an entrepreneur, you might use multiple business accounts to manage your company's finances.

This practice is increasingly commonplace, driving a need for innovative solutions.

Thankfully, a new approach has emerged to address these needs: bank account aggregation.

This approach is known as multi-banking, a key application of the open banking movement.

While multi-banking is useful in many ways, it can also lead to a lack of visibility over your financial flows and wasted time when preparing your accounts. This is where bank account aggregation comes into play.

This service allows you to consolidate all the information related to your business accounts in one place.

But how does a bank account aggregator work in practice? Is it really reliable and secure? What features does it offer? And why do businesses have every interest in using it?

We'll answer all these questions in the following article.

Bank account aggregation allows you to gather, on a single interface, all the information related to different bank accounts - even if they’re held with different institutions.

This "open banking" service is intended for both individuals and professionals.

For businesses, bank account aggregation is a compelling tool since it allows them to:

• Check the balance of their different accounts.
• Browse the details of all banking transactions.
• Have an overall view of their financial situation.

Aggregation was born out of a simple observation: today, most companies have multiple accounts with several financial institutions.

This phenomenon, called multi-banking, is the case for nearly 67% of professionals.* (source: data collected from our customer base in June 2023)

There are several reasons why companies may choose to open multiple accounts:

• In general, the number of providers offering business accounts has increased in recent years. More and more entrepreneurs are turning to online business accounts to manage their daily finances. And for good reason, these solutions are intuitive, easy to use, and offer many additional features to help them with their administrative and accounting management.

• However, some companies may wish to keep their business account with a traditional bank, often with the intent of taking out a business loan.

• Many entrepreneurs tend to spread their cash across different accounts for security reasons.

Bank account aggregation - yet another new tech term that's slipping into the avalanche of financial jargon.

Everyday users should understand that an account aggregator is neither a bank nor a business account.

These three concepts are quite distinct:

• A bank is a financial institution that offers banking services (deposit of funds, credit, overdraft authorization, etc.)

• A business account is an account dedicated to companies. It can be opened either with a bank or a payment institution that has obtained approval from a given country’s designated "competent authority" for prudential supervision (ACPR in France), such as Qonto.

• An account aggregator, as we’ve just seen, is a solution that allows you to gather information about all your business accounts on a single interface. This service doesn’t allow you to carry out banking operations.

Interested in using an account aggregator to gain visibility over your company's finances, but maybe you have some doubts about the reliability of the service?

Rest assured - the system is extremely secure.

Bank account aggregation was introduced by the Revised Payment Services Directive (PSD2), a European Commission lead directive.

According to this regulation, organizations wishing to offer this service must meet three conditions:

• 1st condition: they must have a secure API (“Application Programming Interface”). An API is essentially a set of protocols aimed at simplifying communication and the exchange of data between two Computer Systems.

• 2nd condition: they must comply with very demanding security standards and be approved by PSD2.

• 3rd condition: in Europe, they need approval from a European country’s designated prudential supervision authority.

Today, 3 types of organizations can offer bank account aggregation:

• Banks

• Payment institutions like Qonto

• Fintechs specialized in bank aggregation, called AISPs (Account Information Service Providers)

Account aggregators typically offer several useful features to help you keep visibility over your company's finances. Among them, we focus on:

• Categorizing your transactions (restaurants, professional expenses, equipment, salaries, taxes, etc.),
• Accessing all your financial flows and transaction histories, in real time,
• Creating an expense forecast,
• Setting up alerts that are triggered in specific situations (e.g. when your balance reaches a certain level, during pre-defined transactions, etc.),
• Defining your spending and income goals,
• Creating graphs to visualize your financial flows,
• And more!

Thanks to open banking, account aggregation allows you to easily retrieve all transaction data in one click. No manual entry is required. Everything is automated, so you’re free to save valuable time, trusting that your banking data is in safe hands.

Already a Qonto customer? Try our bank account aggregation service and gain control of all of your financial processes. Want to learn more about open banking? Discover detailed API connection guides in our designated help center article.