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Next generation banking a reality

Posted 7 years ago in Advisors by Matt Vickers
Posted by Matt Vickers

Over the past year or so we’ve been working on our vision for next generation banking. We’ve spoken about this a number of times before – but now, thanks to our friends at ASB and TSB Bank, it’s a reality.

Accounting software and internet banking should be complementary. Think about it – at its heart, Xero accounting software is about financial awareness, insight, and decision-making. Internet banking is about taking financial action and managing your money. It makes sense that the two go hand-in-hand.

With customer consent, data could flow between the two worlds – making each product that much more useful. Transactional data comes into Xero from the bank, where it’s processed and reconciled. If a customer wishes, financial data could be passed back to the bank for a variety of services: for payments; for a loan application; or for sign-up to additional services.

The video shows some of the outcomes of our next generation banking work, illustrated through our integration with ASB. Data can be sent to Xero quickly and easily and payment instructions can be pushed back to the bank for authorisation. In the old world you would manually download data and upload into Xero, or at best, complete a paper application form and send to us for processing. With this approach, your feeds are set up instantly and securely. Similarly, there’s no batch payment files to be downloaded and uploaded into internet banking – they’re sent through frictionlessly.

Watch Steve Jurkovich from ASB talking at Xerocon Auckland 2014 about how the cloud is changing banking and how ASB is embracing new opportunities through its work with Xero.

Banks are conservative organisations, and so they should be – after all, they’re handling your money. But a great deal of innovation for banks comes through collaboration. It would be very difficult for any bank to meet all the needs of its diverse population of customers with the vast plurality of products that would be required. They can’t possibly replicate all the Mints, the Billguards, the SigFigs, the Bill.coms, the Expensifys, the Dwollas, and the hundreds of other services out there that have blossomed throughout the fintech ecosystem  that people have come to rely on. Safe and secure collaboration with established partners like Xero acts as a multiplier or an accelerator to a bank’s desirability to its customers.

Watch out for more banks introducing support for next generation banking soon. Or maybe consider switching to one that already does. The future is bright for those that have.

UPDATE:  If you’re a FastNet Business customer who’s already set up feeds by sending in a paper form, you can still activate direct payment link.  Find the Accounting Setup section in FastNet Business under Administration > Client, and select ‘Automatically Import Payments’ against the accounts you want to make payments from. Follow the process to connect up the feeds, and the next time you create a batch payment file, it will automatically be sent to FastNet Business. Easy.

What people are saying about next generation banking

And it works. Here’s what people are saying about this new generation of banking:


Joe Tiddy
April 17, 2014 at 10.04 am

Nek Level.

April 17, 2014 at 12.22 pm

This is cool, nice work ASB and Xero! Australian banks time to put those record profits to good use and step up and make this happen.

April 17, 2014 at 12.45 pm

I just wet myself.

April 17, 2014 at 1.22 pm

This looks great.

At the moment in the UK only HSBC have a “Partner bank feed”, and nobody else does anything directly with Xero apart from the Yodlee feeds. Is that picture likely to change, and if so do you have any ideas on timescale? (Or even which banks to watch!)

April 17, 2014 at 2.55 pm

This is great, well done ASB – Ive been using it for a few weeks now, works a treat.

Id imagine this is just the start.

As an example of an additional feature … Banks could see the number of days and balances of your debtors and creditors (via their API feed from Xero) and project an upcoming need for a temporary OD.

The Bank could make an automated offer to their customer (via Xero?) to increase their OD limit based on the customers cashflow position today… from the banks point of view, they have a good understanding of their security value because they have the “live” data of their customers balance sheet (Banks generally hold a floating charge over the business assets).

Andrew H.

Philip Bridgen
April 17, 2014 at 4.12 pm

Kiwibank, where are you with this level of bankingXero service innovation? Way past time to put in a real effort to catch up, I think!

David Rynne
April 17, 2014 at 4.24 pm

This will be an epic change when it eventually takes off. Looking forward to seeing it in Australia. What could be better than the equivalent of BPay a bill directly from Xero?

Glennis Stuckey
April 17, 2014 at 5.42 pm

Very, very cool! I have just forwarded the link to my clients with ASB.

April 17, 2014 at 5.50 pm

This is awesome – can’t wait for Australian banks (NAB, Westpac and BOQ) to get on board. Hopefully not too far away.

Jay Kimelman
April 17, 2014 at 11.50 pm

When can we expect to see this in the US? This is a huge advancement, and a much needed one. Please let me know what I can do to expedite the process!

April 18, 2014 at 5.17 pm

This is sensational news!! I’m excited!
Convenient and streamlined processes that take additional hassle and time consuming tasks out of the equation. Well Done!!!

My clients are going to love this when all the banks in Australia are on board!
Any news on when we can expect full participation here?

Ben Walker
April 18, 2014 at 7.43 pm

Wow – this is incredible. I’ve been looking forward to the day when Xero even automates beyond batch payments.

My first reaction (from a client perspective) is wondering if this gives us as their adviser, access to their banks – but I’m comforted straight away that this is solely sent to the banking platform for approval, not payment.

Looking forward, like many, for this to reach Australia! 🙂

April 18, 2014 at 8.22 pm

The inward and outward dishonour cheques in the Business Account. How would these dishonours reconcile / identify with the records on Xero software?

I also presume the accountants would only have access to view on their client’s xero record.

This integration between the bank and Xero is really great. This is going to be a big exposure of Xero to the small business bank customers. This is a game changer.

April 19, 2014 at 8.41 pm

Awesome work Xero. ANZ hope you guys are keeping up and will be next. This is good enough to change banks. Looking forward to ANZ becoming the next partner.

Michal Turek
April 28, 2014 at 11.03 pm

Well done. I keep an eye on it since it was mentioned in Xerocon Sydney 2013. Can we do something to make the Aussie banks come on board faster?

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