Published on the 13/07/2016 | Written by Beverley Head
The Commonwealth Bank is the latest financial institution to deepen its relationship with accounting software provider Xero, allowing bank feeds to be set up directly from the bank’s or Xero’s platform…
According to the bank more than 100 small businesses requested a data feed with Xero in the first 24 hours of the service going live.
Trent Innes, managing director of Xero in Australia, said that in the past it could take up to ten days to arrange bank feeds from the CBA – but this was now possible overnight. He also hinted that this was the first result of a “deepening relationship” between Xero and the CBA.
In fact Xero is far from monogamous with its deep relationships – it announced a similar arrangement with the NAB over a year ago. But these things typically take a long time to mature – the Xero/NAB deal itself took a year’s worth of negotiation according to Xero’s former MD Chris Ridd.
CBA has an equally plural relationship with accounting software companies. It has already got a similar arrangement in place with MYOB, as has ANZ.
The fact is that there is a continuing land grab with both the major accounting software companies, and the banks continually adding functions to their online platforms, and partnering where it makes sense to broaden the entire financial ecosystem.
Xero for example has links with more than 50 Australian financial institutions which allow bank feeds direct into the system, although mostly those feeds are still initiated from the Xero system and with some to-ing and fro-ing with the bank to finalise the arrangement which is where the 10-day delay often arises. Where businesses use a financial institution that isn’t already signed up with Xero to supply bank feeds, the company leverages Yodlee to effect data transfers.
Innes said that the next important step was to encourage more financial services institutions to embrace two-way data flow where besides the bank sending its feeds to the Xero platform, financial data from an SME could be uploaded to the bank, in order to improve the range of services that the bank was able to offer. He claimed that there were only around 20 financial services organisations that allowed this two-way data flow, and that growing that list would be a priority.
According to a report in the AFR this month, in Australia only NAB – which is the largest provider of business banking services in Australia – allows this two-way flow of information, though Xero told the newspaper it was hopeful the other three majors, ANZ, CBA and Westpac, would follow suit.
The progress of the company internationally will be on full display later this month when Xero holds its annual general meeting in Sydney, the first time it has held the meeting outside of its home market in New Zealand.
