Open Banking: Bank on better feeds

Bank feeds are better when they’re direct, and with Open Banking changing the landscape for developers and banks, small businesses are best-placed to benefit. Here's why…

If you use Xero, you shouldn’t be a stranger to bank feeds. Bank feeds pull in transactional data daily to help Xero subscribers see their cash position and make more informed decisions. But how do direct bank feeds compare to third-party solutions? Well, when you go direct, bank feeds are:

Accurate, with up-to-date data you can trust

number2

Supported officially by the bank and Xero

x

Easy to set up using a one-time process

It’s clear – they’re the best choice for businesses when it comes to keeping data secure, accurate and up-to-date. But not all banks support direct bank feeds so small businesses may need to use a third-party solution to connect the dots. However, with Open Banking on the horizon, that’s all about to change.

Changing the locks

Mandated by the Competition Markets Authority (CMA), the new Open Banking standard means nine of the UK’s big banks have to make it easy for customers to securely share their data with third parties. So, for developers of financial technology like Xero, or alternative lenders who use banking data to make decisions, Open Banking represents a real win.

With Open Banking, customers can choose to share information with service providers. It will be easy to grant access without sharing banking passwords or security details, and it’ll be just as easy to revoke access. Essentially, bank feeds will become direct by default, with secure access made available to developers at the request of the customer.

It’s a little nudge that forces banks to create open and direct bank feeds – meaning everyone gets the benefits of seamless, secure banking integrations, regardless of their choice in bank or service provider.

 

Freedom and freeness

At Xero, we’ve been working with banks to drive down the cost of direct bank feeds into our accounting software. But, with Open Banking, our expectation is that direct bank feeds will soon become free. Banks like Santander already provide free direct bank feeds to Xero customers, and the cost of other bank feeds is low, but free is always better.

Not only should the cost decrease, but customers will find themselves with the ability to use direct bank feeds with more services than ever once Open Banking takes full effect. Choice is great for competition and innovation, meaning small businesses will find themselves with better options when it comes to software and service providers.

Our commitment

As always, we’re committed to supporting small business success. So we’ll be working with the banks as they develop their Open Banking feeds to make sure small businesses benefit from the new standard.

If you want to know more about how Open Banking will affect you, including the timeline and information for accountants, bookkeepers and small businesses, you can learn all about it at the Xero resource centre.

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