Open Banking – How will this impact my business?

With all the excitement around Making Tax Digital for VAT there is another change which is going to have a significant impact on many businesses who use cloud accounting solutions which has rather slipped into the background.

Maybe you’ve heard of Open Banking but haven’t thought of it as something that is going to impact on your day to day business processes. In fact the new EU standards which are scheduled to take effect on 14 September will impact many cloud accounting users who have got used to their bank feeds pulling their bank transactions into their software every day, making the bank reconciliation process easy and making sure their information is always up to date.

Open banking is defined as the practice of sharing financial information electronically, securely, and only when customers give their permission. In terms of cloud accounting and bank feeds the changes taking place mean that the way some banks connect to cloud accounting solutions, including Xero, will change; some of the existing bank feeds will no longer be available and will be replaced by new direct feeds using Open Banking. Any organisation currently using these feeds will need to change to new direct feeds, where available, ensuring that their transactions continue to flow into their software each day. 

Unfortunately some businesses won’t have a feed to connect to straight away, as not every account type will be supported immediately and some banks will be making feeds available at a later date.  For those users there will be the option to import transactions by downloading information from online banking, until such time as the banks have made the new feeds available.

This might all sound a little worrying and possibly frustrating too, especially where you have been using bank feeds and have got used to the improved processes they bring. Here at AAB we can answer any questions you might have around open banking and Xero in particular, including whether your bank feed is affected, what action you need to take and when a feed is likely to be available.

Contact us today with any queries you might have about Open Banking its impact on your business. Our team can help you identify the action, if any, you need to take, to ensure that you continue to enjoy the benefits of up to date and accurate information in your cloud accounting software with as little disruption as possible. 

For more information, please contact Lynsey Taylor (lynsey.taylor@aab.uk) or your usual AAB contact. 

To find out more about Lynsey and the Cloud Accounting team click here.