Banks historically struggle to meet the needs of small- to medium-sized businesses (SMBs) efficiently due to their diverse nature. Open banking offers a solution by allowing lenders to access transaction data securely, providing insights into a business's financial health. This enables quicker and more accurate risk assessments, leading to faster approval and disbursement of financing solutions. Traditional credit scoring models may not accurately reflect SMBs' financial stability, making transaction data crucial for fair lending decisions. Regulators promote competition and innovation by enabling access to transaction data through open banking APIs. Tech-first financing solutions democratize SMB lending, with partnerships between banks and fintech companies expanding access to capital for underserved communities. HSBC and Nav, among others, have announced initiatives to bolster SMB lending and financial health insights using data-driven algorithms.