At Xero, we understand that a connected business is an efficient, successful small business. We also know that a business’s Xero account is only as powerful as the information that feeds into it. For this reason, we’ve been looking for a way to securely connect more banks and financial services organisations to Xero faster and more easily, regardless of their location globally or the number of customers we jointly serve.
Today, we’re announcing the launch of the Xero Bank Feeds API. It’s an evolutionary leap in how banks, payment providers, and lenders interact with Xero customers.
Days, not months
Instead of Xero building a feed for each individual bank – a process that could take months per bank – financial institutions will be able to build to Xero’s API as quickly as in a few days. It allows banks to nimbly respond to customer needs, and it enables Xero’s financial connections to grow at scale.
“We’ve always been selective in providing bank feeds to the broader fintech community, as we’ve needed to focus on building feeds for the largest banks first,” according to Richard Considine, who is Xero’s product manager for financial services in the UK “Soon, approved partner app developers and institutions that want to push feeds into Xero for our mutual customers will be able to.”
Xero has over 1.4 million subscribers in 180 countries. They increasingly want their financial accounts connected to a Xero bank feed for an up-to-date view of their cash position. Customers expect bank feeds as part of their bank’s products now, a fact that digitally savvy banks can’t ignore. Whether it’s a major international bank or a fintech startup, they’ll soon be able to respond to customers’ requests.
Xero users can also move faster with the new API. They’ll be able to connect to bank feeds in a matter of minutes and see their account details populated immediately, instead of filling out paperwork and waiting as long as 10 days to be connected. Banks can choose to update feeds as often as every four hours, providing business owners – and their advisors – with near real-time oversight of their finances.
“Smart accountants will increasingly choose financial products that enable greater visibility of their clients’ cash position,” according to Aimee Ferguson, Xero’s product owner for bank feeds in Wellington, New Zealand.
The API, or application programming interface, is not new to Xero. It was Xero that created the first cloud accounting API in 2007, inviting outside developers to build apps that integrated with Xero. Today, there are over 700 apps in the Xero ecosystem. They communicate with our API an average of 15 million times a day, automating mundane business tasks, providing insights and, most importantly, saving time.
Almost 130 financial institutions offer direct feeds to Xero today, and the API will multiply that number rapidly – just as it did with third-party apps. The Xero Bank Feeds API will especially boost opportunities to grow in regions that Xero is just entering, such as Asia.
The new API is also good news for Australian accountants and bookkeepers. In a survey, 71 percent of Xero partners named banks feeds and reconciliation as their favourite features in Xero. Direct feeds ensure their small business clients are working with accurate data.
And whenever banks create new products, instead of needing to wait, they can have a dedicated bank feed available for the new product immediately by writing to Xero from the day it’s launched.
A streamlined experience
The bank feeds API will eliminate the need for workarounds in Xero with some financial products, such as prepaid corporate cards, by providing a direct bank feed. It will also help automate more of the accounting for loans in Xero.
“We’re enabling lenders to speed up the pace at which they can create a beautiful end-to-end lending experience” according to Dimitri Stylianidis, head of data products at Xero. “Lenders will be able to create a bank feed and reconcile the repayments and interest on the loan”.
Foreign exchange providers whose customers use Xero will also find the API useful. Buying and selling in different currencies exposes a small business to exchange-rate risk, and to the complexity involved in holding balances in foreign-currency accounts and making payments in and out of them. They can now sync these transactions and balances with Xero automatically, so businesses gain greater visibility of their financial position across currencies and financial providers.
The Xero Bank Feeds API is the first of a series of APIs we’re building that will enable automated connections to financial services. So watch this space!
Ben Styles is Xero’s general manager of product for financial services, based in Melbourne.