Open banking for accountants and bookkeepers

Open banking allows people to safely share financial data with third parties. Find out what this means for your practice and the clients you support.

What is open banking?

The Open Banking standard means that banks have to make it easy for customers to safely and securely share their data with third parties. It’s a way of giving consumers and businesses more personalised financial services in a safe and secure way.

Traditionally, banking in the UK has been dominated by five big banks, which together control 80% of the country’s retail banking market. An investigation into banking services concluded that there was a need to improve competition in retail banking and financial services. So the Competition and Markets Authority (CMA) brought in Open Banking to encourage competition and give people more choice over financial products.

Allowing people to share their bank account data with third-party providers is not a new thing, but Open Banking means the customer is protected – as long as the provider is authorised.

The aim of Open Banking is to give people and businesses more control over their finances and to open up the market for new products and services from smaller financial providers.

How secure is open banking?

Third-party apps and websites that want to use open banking have to be regulated by the Financial Conduct Authority, or a European equivalent.

Open banking allows people to share data and financial information without handing over any passwords or login details to anyone.

Businesses and individuals using open banking retain full control over their financial data, choosing what they share, with whom and for how long.

How will open banking affect accountants and bookkeepers?

Small business owners want to have an easy view of their cash flow and a good idea of how their business is performing. Open banking will have a big impact on the way new and emerging financial services can be accessed.

And as initiatives like Making Tax Digital are introduced, lots of your clients will be moving to online accounting technology to manage their finances. With open banking, the number of different financial products on the market will increase, making it easier for customers to access appropriate tools to manage their finances.

As their accountant, you should be ready to advise your clients on how they can take advantage of what open banking will bring.

With a good understanding of how open banking affects SMBs, you’ll be able to suggest appropriate products and services that will help them get a holistic view of their accounts, including:


Applying for a small business loan traditionally involves a lot of manual effort, with business and financial information typically being shared in paper form. Open banking helps speed the process along by sharing data securely with third-party providers. Research the options available to help your clients find the right products and services for their business.


Virtual financial advisors

Open banking makes it even easier for accountants to connect with their clients. With secure access to client banking data, accountants can advise and support small business owners online.

Open banking will give businesses and accountants access to a wider range of third-party providers and apps that help them manage their finances.

For modern business owners and accountants, being able to access information on the move is essential. And as Open banking paves the way for more financial products and services, a lot of these will be made available in app form.

virtual finance

Open banking with Xero

Although open banking was only introduced in January 2018, for over ten years Xero has been integrating banking with small business accounting. With direct bank feeds, businesses with Xero have been able to receive their transactional data from their bank on a daily basis and share this information directly with their accountant or bookkeeper. Open banking provides the same transactional data, so by working with banks on direct feeds over the past ten years we’re effectively ahead of the curve.

With both parties able to access the data at the same time, accountants can offer relevant and timely advice to clients without needing to be in the same room – or even the same country.

The power of open data has been part of Xero’s DNA from the beginning. Sharing data through Xero’s open API and working with add-on app partners, accountants and their clients can connect to a growing number of financial products and services – all designed to make running a business easier. And, with our AISP authorised status, you know your clients’ banking data is in safe hands.


Top tips and best reads

Learn more about open banking and see how some banks and service providers are already providing its benefits to businesses and advisors.