Open banking for Xero users
From 14th September new EU wide standards will mean changes for businesses using Xero. Users who currently connect their bank information to their Xero account will need to update their connections to comply with new ‘open banking’ standards.
The good news is that the new feeds are secure, easy to set up, and free. Changing over is a simple process and it should take less than five minutes to connect new feeds with each bank account.
What is open banking
Open banking means you can choose to share your bank account information securely and electronically with other parties. This could include sharing information with Xero or finance providers who may need access to banking information before they approve funding.
The change is designed to encourage more competition in the banking industry, meaning better choices for bank customers. The increased transparency and control of data, plus the ability to securely share information will help speed up slow processes – such as gaining mortgage approvals or loan agreements.
What does it mean for you
If you currently have bank feeds connected to your Xero account, you will need to update them under the new open banking requirements.
This will be a straightforward process which, for most bank accounts, you will be prompted to complete by Xero. It should be as simple as signing in to your bank account and authorising Xero to connect. Xero have created a video which illustrates how this can be done.
Existing bank rules may also be affected. If you have bank rules set up, check these are still working once the new bank feed is connected.
Under the new requirements you will also need to re-authenticate the bank connection every 90 days. This is a security feature designed to help you protect your data – you will be prompted in Xero to do this when necessary.
When will bank feeds change
New feeds will be available for most account types by 14th September 2019. However, some banks – including Barclays Bank and any with a UK/EU feed set up using Yodlee – will not be available until a later date.
Where this is the case, customers will have to either manually import their transaction into Xero or wait until a feed becomes available and backdate transactions. Help on how to manually import transactions can be found in Xero central.
We will email our WMT clients using Xero to remind them to update their feeds. You can also check the status of your bank feeds in Xero Central by clicking here.
What will happen if your bank feeds are not changed by the deadline?
If you do not update affected bank feeds by the deadline, your data will stop being automatically imported into Xero and you will lose access to benefits like easy bank reconciliation. New feeds can still be connected later, but you will have to backdate historical transactions to avoid gaps in your data.
For Xero users the transition should be simple, but if you have any questions on the open banking changes please contact you usual WMT advisor or Jane Spraggs.