Technology has once again put the banking sector into a state of flux. Since the release of the world's first ATM in 1969, banks have been working to automate services once handled by tellers in branches, to make them more widely available.
The birth of the internet saw the finance industry recalibrate itself again, moving to replicate its traditional banking operations on their respective websites. Banks worked hard on developing mobile apps and streamlining their online presence.
Banks are now coming to you
Now, with the emergence of small business platforms, like my company cloud accounting software Xero, banks are working to make their customer's data available when and where they need it -- in their system of record.
Cloud accounting platforms are at the core of the new financial web - which is the flow of data between banks, accountants and small businesses. Xero's announcement today, that we have entered a technology relationship with Wells Fargo, is an example of how the financial web is growing. As we work to extend the small business financial web, we're empowering small businesses to harness the power of their financial data and banks to better serve their customers.
An open API opens up an ecosystem of opportunity
Many of the world's leading banks are moving ahead with their cloud policy, opening up their APIs to developers so users have a more robust range of services to choose from, and greater reliability, control and security over the data they share.
Brett Pitts, Head of Digital for Wells Fargo Virtual Channels says, "We're incredibly pleased that Xero is the first major technology company to join us on the journey of creating a more customer-focused model of sharing data between companies that have common customers. In an era of increasing concern about the security of electronic financial data, it is time to move toward more secure and more reliable data exchange methods."
The financial web is set to revolutionize financial services offered to small businesses. It will simplify and streamline services to give small business owners better insights into their business and improve access to capital. It frees up businesses to focus on what they do best. And it allows banks to innovate at speed and quickly deliver new services, tools, and technology to their customers.
Xero CEO Rod Drury said: "The foundation of the financial web is the very important connection between secure bank feeds and accounting. It enables small business owners, working in the cloud, to do their bank reconciliations on their mobile phone while riding the train into work, or capture a real-time view of their cash flow ending the monthly stress of catch-up. As simple as it sounds, it fundamentally changes how a business can operate - anytime, from any device with insights to help them make decisions on the fly."
Data insights to drive smarter decisions
By embracing cloud technology, small business owners are gaining access to sophisticated enterprise-level software, and it's opening up a world of opportunity.
Entrepreneurs are able to access and share real-time information on how their business is tracking. This has the power to instill greater confidence, better decision-making and afford entrepreneurs greater access to affordable funding to run or grow their businesses.
A more secure way to share
As more small business owners move away from desktop software, where data is manually sucked in, we're seeing a need for secure server-to-server connectivity. A direct pipeline between our servers and the financial institution is much more secure. It's a model the industry can use as a blueprint to create more reliable and secure data sharing.
More banks are working directly with reputable software providers to establish robust connections that safely open up the flow of data. It's also creating new opportunities for small business owners to put their information to work for them.
Having a flow of reliable, high-integrity data, that is untouched by humans, also opens up more opportunities for the small business market. In the process, it transforms it from a risky, fragmented market with small deal yield to one that is reachable, serviceable and profitable.