The accounting and bookkeeping industry is no stranger to technology transformation. Open Banking has arrived as another critical evolution to improve the efficiency and security of business.
Thanks to the new Open Banking legislation in Australia called the Consumer Data Right (CDR), accountants and bookkeepers can now retrieve correct financial data more securely than ever before.
Open Banking offers an alternative to screen-scraping, the technology used commonly today. This technology has needed a rethink for some time, because of the inaccurate transaction data it sometimes provides and the issues it presents for security.
Here we delve into how and why Open Banking paves the way for a more secure and reliable approach to sharing financial information.
The problems are mounting with the existing technology.
Traditionally, there were two ways accountants and bookkeepers could access client transaction data; each with their drawbacks.
Open Banking overcomes the frustrations that come from these existing technologies.
Screen scraping leaves clients and professionals vulnerable: New clients are taken to a ‘masked website’ of an independent screen-scraping platform that’s interface design, which uses the bank’s logo and colours, gives the impression it is aligned with the bank, but it’s not.
The client will enter their username and password into the screen-scraping site, contravening most banking terms & conditions, and potentially leaving the client vulnerable to fraud.
Encouraging clients to share their passwords with third parties may also be contrary to the ethical guidelines and professional standards of the accounting and bookkeeping profession.
Direct Bank Feeds still frustratingly limited, and some still use paper forms: Only a handful of banks allow direct feeds and only for certain types of accounts. For those that do share transaction data with third parties, there can be significant barriers.
The result can be inconvenience and may cause frustrating delays.
When accountants or bookkeepers need to set up direct bank feeds for their clients, they typically require a signed authority form. This process can lead to delays in onboarding new clients as clients need to physically complete, sign, and return these forms. This can be particularly cumbersome for clients with busy schedules, are located far away or when there are multiple signatories.
Gaps in data feed technology is the biggest problem.
Accountants and bookkeepers are also aware that screen-scraping can suffer drop-outs and inaccuracies – often as a result of banks taking measures to frustrate unapproved data access.
Inevitably, inaccurate or incomplete data reduces the quality of financial analysis and reporting, which frustrates everyone involved.
To onboard clients better, access to historical data is needed.
New clients often first come to accountants and bookkeepers with their books in a mess. But direct feeds and screen-scraping technology primarily provide only recent transaction data. They generally do not have the capacity to retrieve data beyond 3 or 6 months (often less), which means that accessing financial records from several years ago can be impossible.
This leaves the clients frustrated by having to delve back to the historical records and their accountant and bookkeeper equally frustrated to ask in the first place.
The Rise of Open Banking: A Paradigm Shift in Technology.
The time has come. Better technology is now available through Open Banking. In fact, accountants and bookkeepers may soon be compelled to use it, with the federal government consulting about phasing out the old technology. Australian banks have already invested hundreds of millions in establishing Open Banking. It’s just a matter of time.
No need to wait to overcome frustrations
The good thing though is there’s no need to wait to overcome the frustrations associated with screen-scraping and direct feeds. Accountants and bookkeepers can start taking advantage of Open Banking right now.
The introduction of Open Banking has established a way out of the risks with a standardised and Bank-Approved framework for sharing financial data securely between financial institutions and authorised third-party providers. Open Banking is pioneering a new era in financial data protection.
- Bank-Approved Approach. Through Open Banking, financial data is shared through interfaces controlled and monitored by the banks. This marks a significant departure from the previous reliance on third-party applications and offers the strongest security ever available.
- Reliability of data. Because Open Banking is backed by Australian banks and removes security risks, banks give full access to all data approved by the client to share, including historical data, without gaps. One click of a button and there’ll be no more troubles.
This legislation has allowed concessions to certain “Trusted Advisers” including accountants and bookkeepers who are registered professionals to be nominated by clients to securely receive their bank feed data.
Accredited Data Recipients (ADR) to enable Open Banking.
However, it is a matter of finding a data provider that can enable Open Banking; these are known as Accredited Data Recipients (ADR). Within Australia, the Australian Customer and Consumer Commission (ACCC) decides which software providers deserve such a title, and very few have earned it, due to the complexities of the registration process.
One such software provider is ACSISS, by SISS Data Services.
SISS Data Services achieved ADR status, having spent over 10 years in Australia developing software solutions for banks and accounting software providers that deliver high reliability and high security bank data feeds.
ACSISS Adviser by SISS Data Services, is a subscription service for accountants and bookkeepers to securely receive client data from Open Banking.
It’s quick and easy to get started.
It just takes one simple step for accountants and bookkeepers to register for ACSISS Adviser. Once registered, the accountant and bookkeeper then sends an email link to the client. The client then takes two simple steps to give approval to access their data. No password sharing. No paperwork. It’s quick, painless, and easy.