3 ways accountancy services can take advantage of open banking
What was once a closed, disconnected industry is now moving forward at breakneck speed. By opening up access to financial data, open banking is unlocking new possibilities for accounting software platforms. Here are three key ways these services can use open banking to gain a competitive advantage and stay ahead of the game.
Open banking brings several opportunities for accountancy services to improve their offering.
It makes it easier to import data to accounting software, eliminating the need for manual uploads.
By aggregating data from several accounts, it can also help services (and their customers) get a better grasp on the financial situation.
With standardised data, processes become more speedy and efficient.
Open banking is already transforming the traditional banking industry, as well as payments and lending, but what does it mean for other industries like accounting?
By giving consumers more choice and enabling them to better manage their own finances, open banking is sometimes perceived as a threat to accounting software providers. But in fact, it provides several opportunities to automate manual tasks and increase transparency in a business’ finances.
Here are 3 simple ways accountancy services can take advantage of open banking to increase revenue – whether it’s through automation, reduced costs, or just attracting more customers with a better experience.
1. Automating the import of data
Many accounting platforms today still rely on outdated ways of importing data into their systems, such as uploading documents or bank statements manually. This usually means extracting bank account statements into CSV, OFX, or QIF formats, then importing the data into the accounting software, and reconciling the transactions. All of which is done manually.
This process needs to be repeated for every customer and bank account.
It’s time-consuming, leaves plenty of room for human error – and did we mention that it’s all done manually?
By using open banking, accountancy services can access customers’ financial data in real time directly from their business bank account, including data like their balance, account information, and transaction history. And since the data is coming from banks, you can trust it’s accurate and up-to-date.
This greatly simplifies the process of importing data to accounting software. It happens automatically after a few clicks. You eliminate the need for uploading statements on an ongoing basis and leave no room for errors.
Crucially, this results in less friction for the customer which in turn means higher conversion and better experiences, as well as increased efficiency thanks to reduced time spent on manual work.
2. Get the full picture
By leveraging open banking, accountancy services can let customers see all of their business accounts across multiple banks – all in one place.
With a single view of a customer's business transaction data, accountancy services and their customers can analyse and act on the full picture, instead of reviewing one piece of their bank account puzzle at a time.
This can help supercharge accounting conversations by enabling deeper insights, ultimately giving customers a greater understanding of their business finances and more control over their financial situation.
3. Increased efficiency and speed
Transaction data imported from business bank accounts is usually raw and unfiltered, requiring extra work to make it useful. When this data is derived from multiple bank accounts, it often comes in different formats and can be hard to combine and use.
But some open banking platforms can go beyond just gathering account data – and add value to it by cleaning it up to deliver data in a standardised format. This makes it easy to understand and immediately put to use, resulting in improved efficiency and reduced operating costs.
Not only does this save time on internal processes, but it also helps improve the speed and quality of the service provided to the customer. With neat and tidy data, the process of manual bank account reconciliation can be automated.
Every transaction needs to be matched to make sure customers’ records are up-to-date, and having readable transactions that are immediately ready to use save time, reduce costs and minimise human errors.
Taking advantage of it all
Accounting software providers have the opportunity to create a lot of value by leveraging the new capabilities made possible by open banking. The three examples above are really just scratching the surface.
Interested in learning more? Get to know more about our products. If you’re curious to explore other benefits or discuss how you’d like to leverage open banking to get tangible business results, get in touch – we love a good chat.
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