Open banking and new bank feeds
Aug 07, 2019
From 14 September 2019, new EU industry-wide standards are scheduled to take effect. This is called ‘Open Banking’, and it’s been designed to give you more control of your banking data and how it’s used, as well as to encourage more competition in the banking industry.
As a result of Open Banking, the way that some banks connect to Xero and Quickbooks will change, in order to comply with the new requirements. Existing Xero and Quickbooks bank feeds with Barclays, as well as all UK and EU bank feeds set up using Yodlee, will no longer be available. Many of them will be replaced by new direct feeds using Open Banking. The good news is that these new direct bank feeds are secure, easy to set up, and free.
If you are currently using Barclays or Yodlee bank feeds, you may need to change to the new bank feeds, where available. It should take less than five minutes to connect feeds with each bank. There is information on both the Xero and QuickBooks websites which lists which bank feeds are affected and explains about updating your bank feed.
When do I need to make the switch?
Some businesses won’t have a feed to connect to straight away, as not every account type will be supported immediately and some banks will be making feeds available at a later date.
In the interim, if you don’t have a new feed to connect to, you’ll need to manually import transactions into Xero or Quickbooks, or wait until a feed is available and then backdate transactions. Alternatively you can import all transactions via .csv files from your existing online bank link. This will require care to ensure there are no omissions or duplications, otherwise your bank account won’t balance.
The new feeds will be made available in stages. When it’s time to switch, you’ll see a notification on your Xero or Quickbooks dashboard. If you subscribe to Xero or Quickbooks directly, then you should get an email from them too.
If you are affected by the new bank feeds, rest assured that we’ll be here to guide you through the change. You’ll need to have your online banking credentials to hand, and then it’s a pretty simple process.
What if I don’t switch in time?
If you don’t change your affected bank feeds by the deadline, your transactions will stop being imported into Xero or Quickbooks and you’ll lose the benefits of having a bank connection – such as easy bank reconciliation.
You can still connect a bank feed at a later date. However, you’ll need to make sure that historical transactions are imported back to the date that the bank feed disconnected, otherwise you’ll have a gap in transactions.
You can import up to 12 months of historical transactions – simply select the start date of the bank feed when you authorise the connection. The deadline for each bank feed will be confirmed over the coming weeks.
Existing bank rules may be affected by Open Banking
Be aware that if you have bank rules set up, you’ll need to check they’re working once the new bank feed is connected. This is due to the way the new bank feeds are set up and mapped within Xero and Quickbooks. Let us know if you need a reminder on how to edit bank rules.
Re-authenticating bank connections every 90 days
As part of the new requirements, you will need to re-authenticate your bank connection every 90 days. Xero and Quickbooks will remind you when you need to do this and it’ll be a case of re-entering your online banking credentials. Although this is tedious admin, it’s a new requirement under Open Banking rules.
Get in touch if you’ve got any questions about Open Banking and we’ll be happy to help.