Codat works with small businesses across the globe to help them harness their data in a way that allows firms to grow. Founded in the United Kingdom in 2017, Codat recently expanded its operations into North America.
How will businesses in the United States and Canada benefit from this move?
During the COVID-19 crisis, Codat’s products have been a lifeline for small firms. Tens of thousands of small businesses have used apps, services, and financial products powered by Codat to allow them to harness company data. With Codat, these businesses no longer have to spend hours collecting the data required to submit a loan application, for example.
Via its single API, Codat’s Core product enables real-time data access and visibility, offering deep insight into the business’s financial picture. This unlocks scores of opportunities for small businesses, and allows them to more quickly streamline application processes. Thanks to Codat, which integrates everything from accounting to commerce data, and paired with Open Banking, lenders can easily corroborate the actual financials of a business.
Combining and cross-referencing multiple data sources allows lenders to form a complete and verifiable understanding of a business customer, far beyond what is available from credit bureaus. Moreover, Codat can also use data to help identify and stop potential fraud, a key barrier to lending. According to a 2019 LexisNexis study, fraud losses as a percentage of revenues amount to 5.8 percent for digital lenders, 4.5 percent for small banks and credit unions, and 2.9 percent for larger banks.
PayPal and American Express recently announced they made strategic investments in Codat. Zettle, a PayPal payments company, uses Codat’s technology to transfer point of sale transaction data into their merchants’ accounting software. “The data connectivity Codat enables is a game changer for small-to-medium businesses who want the flexibility to use their preferred tools to run and grow their business,” said Peter Sanborn of PayPal Ventures.
Codat joined FDATA North America in March 2021. Gabriel MacSweeney, who is in charge of strategic partnerships and commercial strategy for the company, said, “At Codat, we are delighted to lend our voice to discussion on the future of open finance in North America. Joining FDATA North America aligns with our mission to enable all the systems and services that a small business uses to work together seamlessly, and underscores our strategic focus and growth plans in the region.”