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Are Xero falling behind on bank feeds?

First QuickBooks and now FreeAgent stealing a march on them

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We chose Xero as our preferred platform for a few reasons, but one main positive was that they had (at the time, or so we thought) the best ofering for bank integrations.  We dont want to mess about with Yodlee and are only interested in direct feeds.  Initially this was because a major high street bank confirmed to us that use of Yodlee broke their online banking terms (this issue less important following open banking) and subsequently because the system was reported as unreliable by other accountants.

It was obviously a bit of a pain (understatement) that Lloyds/HBOS feeds were not available.  Xero have been assuring us for at least two years that those were "coming soon".

When QBOL obtained direct feeds (seems ages ago - a year or so) I raised this with Xero who repeated their claim to be 'nearly there' and gave me some excuse about they could have the feeds now but that would be under the old authorisation structure and they wanted to get the new (open banking presumably) authorisations in place rather than have to 'move' customers leate.  This seemed like a bit of a cop out to me and the length of time it's taken appears to confirm this.

This morning, i have an email from FreeAgent announcing that they will be releasing direct feeds, under open banking, with ALL of the CMA9 banks - basically the entire high street, including the Xero-elusive Lloyds and it appears to me that (as of this moment) they have the best direct feed bank ofering out of all of the cloud bookkeeping packages.

Were Xero really the frontrunners of this and have now fallen to last (or at best, third) place?  Or did we fall for some misleading advertising on their 'market leading innovation'?

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By Chris Maslin
21st Jun 2019 10:09

I'm very much a FreeAgent advocate, but for a bit of balance, I heard effectively the same thing from them re other banks!

My understanding is prior to open banking, there are two options for feeds:
- Yodlee - which as you say has some security concerns, and can be flaky,
- bespoke agreement - these need to be agreed with each bank, with a bespoke technical thing set up.
It's the latter, and perhaps some element of competition naughtiness which lead to the current situation where bank A integrates nicely with software X, but not software Y, whereas bank B integrates nicely with software Y but not software X. Ie I don't really feel it's the case that some banks/software providers are better than others when it comes to integration.

Open banking should be about to change all that, as the banks are all obliged to provide data in a certain unified standard. Hence as long as the software provider is up to speed, going forwards there shouldn't really be a difference between the software providers when it comes to which banks they integrate nicely with.

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Glenn Martin
By Glenn Martin
21st Jun 2019 10:25

What I would like to see but its maybe just me, is bank feeds for the main merchant card accounts.

Izettle and stripe etc are great but they are expensive when used for high volume business.

If someone could do a feed with say Barclaycard, Worldpay and elevon that would nail about 80% of the market and would be the final piece in the jigsaw for my leisure stuff, and I am suprised no one seems to be looking at it.

if your watching this GT help a brother out.

With bank feeds I tend to direct people to banks where the feed works well (and is free) like Santander. The lloyds one is the only issue I have and still process them through Autoentry.

I am sure they are not too far away now that the open banking stuff is in play, as I understand all banks should have the same interface now so once you have done the work to that standard it shoudl work for all banks which is why maybe Freeagent have released them all that same time.

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By johnt27
21st Jun 2019 12:52

It's frustrating but not something I worry about. With the advent of open banking bank feeds are no longer going to be a differentiator, in terms of getting the data in. Even Sage will be doing it soon!

My understanding is that QBO have direct feeds for the big 4 - HSBC, Natwest, RBS and Lloyds. Xero have these, except Lloyds, plus a number of others. Sage have Lloyds. FreeAgent will soon have, as you pointed out, all the big fish, but I'd expect similar announcements from all and sundry in the market.

FreeAgent may have stolen a march but they have had the inside track on both sides of the development process, now being owned by RBS group, and whilst I love the product, I don't see them competing in the same space as Xero/QBO. We support all 3 products with clients.

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By johnhemming
21st Jun 2019 12:52

The problems for software houses with Open banking is getting FCA regulated. The interfaces are otherwise pretty standard.

Xero are, however, registered and have been since late 2018

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