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Open Banking: Goodbye 90 day re-authentication

14th Apr 2022
Brought to you by
Coconut’s simple bookkeeping and tax app is specifically designed for sole traders, helping them...
Share this content

One of the most disruptive changes for the accountant and bookkeeper workflow over the last few years was the Open Banking legislation that came into effect in January 2018. 

The initial ruling mandated the CMA 9 banks—the big 9 banks that came under the CMA’s Open Banking order—to standardise access to bank feeds. It also meant any banking data feeds fell under the legislation, so its tentacles stretched further than just the CMA 9.

The dreaded 90-day re-authentication

No part of the Open Banking legislation was more disruptive than the 90-day reauthentication.

Sam O’Connor, Coconut’s CEO, said:

“Trying to get all clients to re-authenticate their bank feeds every 90 days has been a nightmare for accountants and a catastrophe for productivity in many cases.”

And if the client didn’t reauthenticate, this cut accountants and bookkeepers off from clients’ transaction data, bringing work grinding to a halt.

You can now be in charge of the 90-day re-authentication

In March, the rules changed. Clients are no longer required to re-authenticate access with the bank, they only need to re-authenticate with the Account Integration Service Provider or AISP (typically the cloud accounting software provider). This consent is effectively a check box to allow the AISP to keep the connection open. This is a big advancement on having to go through the full connection flow, which is often laden with friction and fails regularly.

It gets even better… the client is now also able to delegate authority to consent to their accountant. Meaning you can be completely in charge of keeping the connection open.

What does this mean for the industry?

This finally unlocks the benefits of Open Banking, and it’s something we wholeheartedly support. It will mean accountants can much more easily get access to data when you need it.

For sole traders and landlords, this is particularly important as we roll towards the MTD ITSA mandate in under 2 years. This group is typically less engaged with the process of bookkeeping and accounting. By removing this high-friction touchpoint, accountants will be able to service these clients much more efficiently and at a higher margin.

Our CEO, Sam says:

“The Open Banking legislation had the right intentions, but the 90-day reauth put a real spanner in the works for accountants. With this change, we’ll really start reaping the rewards of Open Banking. New software vendors will be able to develop products to drive innovation, safer sharing of data for clients will reduce risk to a minimum, and there will be a much more efficient ecosystem for accountants, especially in the run up to MTD ITSA.”

Coconut connects to over 25 different bank accounts and credit card providers. We're specialists in sole trader software for accountants and Open Banking. Get in touch to discuss how we can help you organise your sole traders for MTD ITSA.

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