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The financial web is smashing the barriers between banks, accountants and small business owners

Posted 1 year ago in Advisors by Rod Drury
Posted by Rod Drury

The accelerating momentum of the financial web, which gives small businesses more accurate business insights and provides seamless access to financial services, has this week been highlighted at Xerocon South.

Automatic bank reconciliation was just the beginning of the financial web. But now, with the more than $1 trillion worth of transactions processed over the past 12 months, there’s a vast base of aggregated data helping to establish the next phase of the financial web. Leveraging the data and machine learning techniques, Xero is working to deliver high integrity accounting for small businesses and their advisors to help them make better decisions with the right data.

Here are a few of the latest developments in the financial web:

Macquarie Bank, Tyro, Xero and Bpay teaming up to improve payments

Xero, DEFT (a Macquarie Bank product), and Australian fintech startup Tyro are collaborating on industry-first, in-product integrations for BPAY, Australia’s most-used bill payment service.

“Macquarie Business Banking has been making our client’s businesses more efficient with BPAY for many years, and we are delighted to now be able to offer the most seamless digital payment experience possible to Xero subscribers,” Dean Firth, Head of Business Banking, Macquarie Bank said.

Initially launching with DEFT to bill customers and Tyro to pay suppliers, Xero’s platform will evolve to enable small businesses to choose from a range of providers to receive and send payment through BPAY’s secured payment service.

“For Xero users, One touch banking in the palm of the hand has become reality. With Tyro, batch, BPAY and soon payroll payments are authorised with at tab on the phone. Online banking, ABA files, sharing credential all a thing of the past,” Jost Stollman, CEO of Tyro, said.

Each month more than 30 million payments are made by more than 50,000 registered BPAY billers, a number that John Banfield, BPAY CEO, expects to grow with this latest innovation partnership.

“We expect that to increase further thanks to Xero’s support and continued innovation in business payments. By offering a secured, trusted payment method like BPAY, small businesses can get paid faster, and their customers know exactly who they’re paying,” Banfield said.

First lending partner in New Zealand

Fuelled is Xero’s first lending partner in New Zealand and will help small businesses access the capital they need to grow. From Xero’s platform, Fuelled enables New Zealand small businesses to get on with business without worrying about cashflow timing issues, by offering funding to small businesses that is secured against unpaid invoices.

Commenting on the partnership, Trent Fulcher, Director at Fuelled New Zealand said, “Like fuel is to a car, every small business needs enough money to flow through it to run smoothly. But there are always times when a business needs an immediate injection of cash to pay a supplier, or a contractor, but cannot wait 30 or 90 days for a customer to pay or a bank loan to be accepted. The first of its kind in New Zealand, with Xero integrated with Fuelled, customers can access an immediate source of finance making the task of managing cash flow easier, as well as providing the means to fund future growth.”

Improved daily, direct bank feeds for more small businesses

Xero will soon have daily, direct feeds for some 100 financial institutions in Australia including 43 regional and industry credit unions to ensure small businesses in regional areas can get access to the same features and capabilities as their city-dwelling counterparts. With up-to-date, accurate data flows, small business to make informed decisions quickly, instead of waiting until the end of the month to reconcile transactions.

Direct feeds from Xero and Commonwealth Bank

Since launching our Commonwealth Bank integration earlier this year, nearly 13,000 businesses have connected their bank accounts to their accounting dashboard. Xero and Commonwealth Bank are expanding their relationship to include direct feeds for business and corporate credit cards, making it easier for businesses to track discretionary spending and reconcile transactions as they come in.

The expanded integration is making it easier for accountants and bookkeepers to set their clients up on Xero with all the information they require at their fingertips.

Anthony Wardley, director of A Square Advisers in NSW, explained that, “One of the first impressions A Squared makes on clients is through the first job performed, and this is usually a Xero conversion. It is great to be able to convert a client to Xero, demonstrate the newly converted file with their existing information and step through the bank feed setup process so that is up and running for the client by the next day. The integrated setup process between Xero and CommBank reinforces the simplicity and benefits of a true cloud system and demonstrates how Xero-based accountants are able to deliver a better client experience from the very start.”

The financial web is improving capital flows into the farming sector

In the last 12 months over 10 million budget transactions were entered through Xero and Figured, a cloud-based production tracking, farm budgeting and forecasting tool that works hand-in-hand with Xero. Banked industries like farming are being completely transformed by the integrations, automation and insights the financial web is delivering. Figured and Xero help farmers monitor their investment, improve farm performance and profits, reforecasting quickly when conditions change.

Most farms are supported by substantial lending secured on the farm asset. The recent drop in milk prices increased many regional banks’ exposure. In New Zealand, we’re seeing more financial institutions to their clients run bank connected accounting software. In many cases, banks are also paying for their clients’ accounting software subscriptions. When loan exposure commonly surpasses a million dollars, it’s an easy investment.

With each layer of the financial web locking into place, you start to get a full financial picture of a small business. A financial institution can, for the first time, see all the banks a small business might be connected to, view a full set of historical and audited numbers, and with a professional accountant able to review the numbers each day, the risk of lending exposure to a small business is substantially reduced.

This level of data-driven risk assessment is something that moves banks away from their reliance on cookie-cutter or paper-based approvals processes and has the potential to completely transform the way banks calculate and identify risk.

Singapore small businesses boosted by integration between Xero and UOB

Setting the standard, small business customers who bank with UOB can integrate their bank accounts with Xero and choose to have their bank transactions sent automatically from UOB to Xero every day, allowing them to check which customers have paid their bills overnight, and which bills from suppliers they need to pay.

Built on top of Xero’s industry-leading open APIs and two-way authentication with global banks and financial services, the financial web digitally connects the services businesses use into their accounting system of record, transforming the software at reconciliation and data entry point to a fully functioning small business platform.

With new payment providers, lending options and improved bank feed connectivity, the continued expansion of the financial web helps small businesses make smarter decisions, improve cash flow, get paid faster and access capital quickly. Accountants and bookkeepers can use the financial web to expose new services and insights for their clients, and ensure the integrity of the data they’re using.

These announcements were made on at Xerocon South, Australasia’s largest accounting technology conference, bringing together more than 2000 accountants, bookkeepers, financial professionals and exhibitors from Australia, New Zealand and Asia and where Commonwealth Bank, PayPal and Amazon Web Services are sponsors.

One comment

Teresa Tidball
September 8, 2016 at 3.32 pm

It’s all really very impressive. I’m definitely looking forward to the live Commonwealth Bank feeds and have been getting more involved with Tyro.

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