What is Open Banking for accountants?
We often overlook how fortunate we are to live in a time when banking is becoming more transparent so that transaction data is easily accessible for accountants.
The introduction of Open Banking in Australia brought about a significant shift in how financial professionals, including accountants and bookkeepers, handle the bank-approved transactional data of their clients.
In this article, we'll uncover what Open Banking is, how it benefits accounting firms, and how integrated bank feeds, as part of general ledger software for accountants, can streamline productivity and strengthen client relationships.
What is Open Banking?
Open Banking was implemented in Australia and New Zealand as part of a broader global trend towards using consumer data to increase competition, innovation and consumer choice.
After a review by the Australian Government in 2017, an Open Banking regime was announced and committed to in a phased approach. A pilot program for Open Banking in Australia was officially launched by The Consumer Data Right (CDR) in Australia on 1 July 2020. Since then, the scope has expanded to gradually widen the availability of Open Banking services within other financial institutions, including accounting firms.
Open Banking is due to arrive in New Zealand in mid-2024. Consumer Data Right in New Zealand has introduced a draft law called the Customer and Product Data Bill that, once active, will give customers greater access to and control over their data in future.
The advantages of Open Banking
Accountants can use Open Banking to improve their practice in many ways.
- Removing information gaps and errors: With Open Banking in place, accounting firms across Australia and New Zealand have a more consistent, structured manner to access their clients' financial data. This reduces the potential for human error or information gaps, meaning accountants can conduct more detailed analysis and reporting, and clients can receive more outstanding service.
- Minimising security concerns: Open Banking in Australia and New Zealand is carefully registered by respective governments. Accounting firm clients have complete visibility on who they can consent to share their financial information with and for what purpose. Accounting firm clients are safeguarded by layers of encryption software, whereas in times gone by, they were vulnerable to potential cybercriminals. Check out our guide on cybersecurity for accounting firms for more on online safety and security.
- Stopping the need for handling paper: Now that Open Banking is in place, accountants no longer must wait for clients to sign paper consent documents with their financial institution to allow them to access their bank feed data.
- Greater flexibility to switch accounting practice software: Open Banking is accounting software agnostic, meaning that the process of asking for permission is streamlined regardless of the firm's accounting practice software. In the days before the Open Banking legislation, accountants would need to make sure every single client was signed up for bank feeds when switching their accounting practice software, so the process could prove very time-consuming and painful.
What is a bank feed?
An integrated bank feed is a digital link between bank accounts and your accounting practice software, such as your general ledger software. Integrated bank feeds automatically import client bank transactions daily into your general ledger.
With Open Banking now in place, integrated bank feeds can empower accountants to overcome many of the issues accounting firms previously faced when importing bank account data into their accounting practice software.
Remember to check out our broader range of integrations that service our Australian and New Zealand markets and build perfect practice management solutions for accountants.
The benefits of Open Banking bank feeds
Open banking for accountants has been a transformative experience, with open APIs unlocking a deeper level of productivity and client satisfaction that would have once been unimaginable.
In this section, we'll explore the advantages of open banking and bank feed integration:
- Instant access to live bank feed data: With integrated bank feeds, you'll know as soon as an online banking transaction occurs, as it will be instantaneously reflected within your general ledger software, providing an up-to-the-minute view of your client's financial transactions and balances.
- Simplifying admin: Integrated bank feeds automatically import transactions into general ledger software. This reduces the need for accountants to manually enter any data, saving valuable time and reducing the risk of human error.
- Encouraging greater productivity: Accountants no longer must chase their clients for data, upload bank statements or complete manual application processes to set up bank feeds, improving overall practice productivity. Giving accountants more time back in their day supports the shifts in focus towards business advisory services.
- Smoother accounting client onboarding: Client onboarding and ongoing consent for accessing their data is managed through integrated bank feeds, providing your clients peace of mind.
What is Access Bank Feeds?
Access Bank Feeds integrates seamlessly with our general ledger software, making it an ideal choice for clients without accounting software.
Access Bank Feeds connects to all major banks, with a direct connection to all the major banks in Australia and New Zealand.
In just a few steps, you can connect your client's bank feeds and securely receive transactions into your general ledger, ready to produce their accounts. It's easy and efficient to bring transactional data into your general ledger. With an easy coding interface and a system that learns from you over time, it's perfect for managing recurring transactions for your clients.
Access Bank Feeds is built using Open Banking in Australia, which means your clients will have peace of mind, knowing they have control over who has access to their data. Our partner providing Open Banking services as a Data Recipient in Australia is Basiq Pty Limited.
Our partner providing account connectivity to client banking data in New Zealand is Akahu, giving your clients control of who has access to their data and making it easier for you to provide services to them.
In Summary
We hope that our guide to Open Banking in Australia and New Zealand has given you insight into the numerous advantages these global banking developments will have on accounting firms, now and into the future.
Implementing Open Banking in our region has resulted in innovations in accounting practice software, such as integrated, secure and automatic bank feeds that streamline finance processes within general ledger software, reducing manual data entry.
Open Banking is made easy with Access Ledger software
From December 2023, Access Ledger will have full Access Bank Feeds integration, launching our general ledger software into a new era.
Access Ledger empowers accountants to effortlessly generate practice-branded financial reports and efficiently manage ledgers for clients needing an accounting solution.
Talk to a specialist about our next-generation general ledger software for public practice accountants today, or download our brochure for further details.
Open Banking References
