After years of indifference, UK banks are suddenly jostling with each other to introduce automatic feeds to accounting software.
HSBC is the latest bank to declare its intentions, with an announcement this week that it will be introducing application programming interfaces (APIs) for Xero, QuickBooks Online and Sage One “in the next few weeks”.
HSBC global head of digital business banking Nadya Hijazi explained that the API platform was the first step in a range of online products the bank is planning to roll out.
“This digital solution provides customers with the financial information they want, when they want, and where they need it – rather than having to visit their online banking site to retrieve the information,” she said.
Meanwhile, two weeks ago Xero announced that Santander was the first UK bank to integrate with its open API. Santader has been exchanging account data with Xero for many years via a direct link (and Yodlee before that), but like HSBC’s project, Xero’s latest system is built around a standard API platform to which other systems can link.
Elsewhere, RBS and FreeAgent have been collaborating for the past year on a commercial partnership based around direct feeds from NatWest/RBS systems to FreeAgent. When authorised by participating clients, the bank will be able to access their accounting data to expedite loans when required and ensure they get the right banking support.
Behind all this API activity is Europe’s second payment service directive (PSD2), which requires banks to open up their data and infrastructure to third-party companies with “open” APIs. The rules come into practical force in the UK in May 2018.
The HSBC and Xero/Santander announcements are just an overture for what’s to come. After keeping accounting software developers at arm’s length for many years, the banks are now planning for life after PSD2 and building alliances with them.
With bank transaction data available to anyone who gets their customers to authorise access, PSD2 will open up a lot of alternative banking opportunities for challenger banks and fintech developers. Expect to hear more of these announcements in the coming months, and new ideas from financial service providers you may not have heard of before.
About John Stokdyk
AccountingWEB’s global editor has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.