Using digital technology means generating data — a lot of it. The data comes from your business and the customers you serve, but access to this data is not as seamless as it should be. Especially when it is sensitive information, such as financial data.
Xero joins the Financial Data Exchange
Cloud-based accounting software company Xero announced it is joining the Financial Data Exchange (FDX) in order to make this information more accessible for businesses so they can better serve their clients. As part of the FDX, Xero says it will be that much closer to an “Open Banking” system in which information is exchanged freely with organizations in the industry.
For small businesses in the financial sector, it means they can get the information they need from financial institution automatically without time-consuming manual processes.
In an announcement on the Xero Blog, Keri Gohman, president of Xero Americas emphasized the importance of giving customers control over their data as well as automation.
Gohman wrote, “We believe that giving our customers control over their data is one of our most important responsibilities. One of the key ways we deliver on this is through secure, direct bank feeds, which automatically import transactions from a customer’s bank or financial institution directly into a Xero organization.”
Technology and Access
Gohman says small businesses, accountants, and bookkeepers are now leveraging Artificial Intelligence and Machine Learning to get more insight into the data they have. Until recently, this was only available to large organizations with a large workforce crunching the data manually or paying for very expensive technology.
Being part of the FDX will allow Xero users to get direct feeds seamlessly to see a comprehensive picture of their business or that of the clients they are serving as advisors. Direct feeds also eliminate manual data entry, which will save accountants, bookkeepers and business owners valuable time.
When this information is readily available, Xero says advisors can answer questions from their clients such as ‘is the business making a profit?’ or ‘what’s the current cash flow situation?’ quickly and easily.
What is the Financial Data Exchange
The FDX was established by banks, fintech firms, and industry groups to improve data security, innovation, and customer control. The organization wants to give consumers greater control with interoperable standards which enabled secure data sharing.
As a nonprofit organization, the FDX is unifying the financial industry with a royalty-free standard for secure access to financial data. This includes support for the Durable Data API (DDA) standard, a secure authentication tool with a restful API for data access to support existing protocols.
Xero’s API
Xero has also announced its own API called the Xero Bank Feeds API. And just like the DDA, it is going to give consumers more control over their data.
With Xero’s technology, banks, payment providers, and lenders can now interact with Xero customers easily. What used take banks months in order to build a feed for direct communications months, Xero says can now be accomplished in as little as a few weeks with its API.
Once the feed is established, they can respond to the needs of their customers faster than ever before.
For the financial industry and the many small businesses who are part of it, they can now take full advantage of the data they have to grow their business and better serve their clients.
Photo via Shutterstock