FreeAgent’s Barclays feeds – only a start

by admin on March 27, 2012

in Cloud Computing/SaaS

Before g0ing on my travels I mentioned that I’d met with Ed Molyneux, CEO FreeAgent. We talked about the now announced Barclays Bank feed topic. From the blurbs:

FreeAgent has a pretty intuitive system in place for uploading bank statements into your account. However, we’ve often been asked whether there’s any way of circumventing the whole “download and then re-upload into FreeAgent” step for bank statements. A lot of our customers have requested the option to have their bank transactions imported directly into FreeAgent – so we’ve been working away at making this a reality.

And today we’re delighted to announce that our first automated bank feeds feature in FreeAgent is now up and running.

Available to all FreeAgent users who are Barclays Business account holders, the new feature allows you to set up automatic daily feeds of transactions from your Barclays Business account directly into FreeAgent, without the need to mess around with electronic statements.

As might be expected, there are plenty of comments asking for more native feeds with HSBC attracting plenty of attention. I’ll return to them in a moment.

It was natural for FreeAgent to come out the gate with this integration. The last year has seen the company gain a significant number of Barclays customers via their Barclays BusinessWorks arrangement. It makes solid commercial sense to remove friction from a customer’s process and especially when that customer is supplying a good chunk of your total customer portfolio. What is less clear is how FreeAgent goes forward.

It is working with the Yodlee screen scraping technology which some believe is far from ideal although it hides some of the uploading of data ball ache from end users. Apparently, Yodlee’s real intention is to force the banks into helping them become brokers of ‘proper’ integration services. So far that has not been a roaring success at the level they wish.

This re-opens the competitive argument around bank feeds. I’ll say it again: this is not a competitive advantage for the accounting software vendors or if it is, then it is temporary because the tide is turning in favour of the banks providing simple but secure integrations. It is the both the banks and vendors who win because they can both use this as leverage to morph the way they do business. Which brings me neatly to HSBC.

Those who are waiting for auto feeds from HSBC are going to be waiting a VERY long time. While HSBC claims global bank status that is only true at the brand level. HSBC seems to be on a mission to make access as hard as possible for its customers. If you are an HSBC customer, you already know about the multiple credential checks you have to go through, including a hardware generated pin. It’s absolutely freakin’ crazy. They will lose business if they persist with this policy. It should therefore be no surprise that one commenter said:

Congratulations Ed – that must have involved a TON of work.
An automatic bank feed is definitely the next obvious move. I’d change banks for that.

However, hoping that other banks will follow suit as some commenters are saying is pissing in the wind. The only way the other banks will make any effort is if they see large numbers of their customers switching. That makes FreeAgent’s bet all the more compelling.

While competitors will (and have) poo-pooed the FreeAgent BusinessWorks deal, once that was in place, then the native feed was a done deal.

Expect to see a scramble around this topic. Other banks will woo the software application vendors. It will be interesting to watch how this plays out, how partnerships are formed and how the banking competitive landscape changes.

In the meantime, don’t under-estimate the impact this will have on the market. It is far more important than these stale discussions.

Update: Xero has had auto bank feeds via HSBC since 2009. However, the bank changed their security measures at the end of last year, inserting the need to manually enter a hardware generated random code plus a load of other ‘stuff.’ This means that for those Xero accounts tied to HSBC, they must have made a security exception. This is not necessarily a bad thing but it is important to understand what is happening. The reason it is not a bad thing is that these types of connection are ‘machine to machine’ requiring no human intervention. Purists will argue that anything going over any network is bound to be vulnerable but that’s an alarmist position.

Comments on this entry are closed.

Adrian March 27, 2012 at 2:18 pm

Hi Dennis, I am a bit confused by this piece. Specifically:

“It makes solid commercial sense to remove friction from a customer’s process and especially when that customer is supplying a good chunk of your total customer portfolio”. Who is the customer here?

You say:
“the tide is turning in favour of the banks providing simple but secure integrations.

But then add:
“hoping that other banks will follow suit as some commenters are saying is pissing in the wind”

I am not being critical, I am just trying to understand what your message is on this important topic. Do you think the banks will come to the party or not?

Are we rapidly approaching the time when the Banks start acquiring a SaaS vendor each?

admin March 27, 2012 at 3:04 pm

Barclays is a effectively a customer for FreeAgent as they do the bundling for Business Works. However, FreeAgent counts those that Barclays brings to them as part of the overall customer count.

I don’t think the banks have a choice in the long haul but so far, the Yodlee approach has not provided enough incentive for them to do the ‘right thing.’ What FreeAgent has here is an order of magnitude different. Yodlee is really a stop gap.

Adrian March 27, 2012 at 3:43 pm

Thanks. When you said “it (FreeAgent) is working with the Yodlee screen scraping technology”, I did not realise that this meant for other banks, and that the Barclays feed was a “direct” one.

HSBC do the same for Xero. Maybe users will switch banks or vendors to get their feed but I don’t see that. Might influence choices for new businesses with a clean slate though.

David Terrar March 27, 2012 at 2:31 pm

Hadn’t realised that the FreeAgent approach uses Yodlee, but putting aside the security concerns, the end result is important. the sooner we get the banks to realise they have to provide proper feeds like they do in The Netherlands or Denmark, the better – it will be another step out of the Dark Ages for the UK banking system.

On Richard’s blog being a stale discussion – I don’t see it. It may be with us early adopters and more forward thinking types who read your blog. Sadly, the average accounting practice still doesn’t have online accounting properly on their radar as one of the routes to making them more efficient and fighting off the competition.

admin March 27, 2012 at 3:08 pm

FreeAgent announced Yodlee’s integration intentions last year.

This is a really big step for the accounting vendors. It is radically different from the Yodlee approach. Check what they actually say on how it works.

My issue is two fold – nothing he says includes anything that’s referencing facts. I have no idea where he’s getting his numbers. Professionals as surveyed by ICAEW didn’t say it wasn’t on the radar, just that they were not doing it as I recall. But that doesn’t matter because the real action isn’t coming from ICAEW member firms. That’s something most fail to recognise.

David Terrar March 27, 2012 at 3:19 pm

It wasn’t so much that ICAEW survey I was referring to. Our PR agency did a small sample, general survey of medium and small practices over the last few weeks and going online just wasn’t mentioned in what they might do next.

Understand what you mean by the real action – I just think we need to spread the message and the net wider.

Bob Harper March 28, 2012 at 7:24 am

David – so what did your research tell you they are going to do?

A comment I’d like to make is that that efficiently isn’t the answer for a firm to fight off the competition. They need to be more effective. It’s not just a case of changing technology but changing their pricing and mindset – in fact, their entire business model.

Nic Wise March 27, 2012 at 3:46 pm

I’m with HSBC for the business at the moment. If they are that bad, or that unlikely to do any kind of feed, I think I’ll change (personal is with Barclays who I dont love either, but at least they are getting better!)

Martyn Shiner March 27, 2012 at 3:47 pm

Dennis
>If you are an HSBC customer, you already know about the multiple credential checks you have to go through, including a hardware generated pin. It’s absolutely freakin’ crazy. <

I use Barclays and HSBC web based banking and they BOTH have a hardware pin generation system and BOTH have multiple credential checks – in fact HSBC BIB (the SME rather than enterprise system which is HSBCNet) is less of a hassle than Barclays IMHO.

AFAIK NatWest and Lloyds also have multiple credential checks and a hardware PinSentry type device. So what is your point re HSBC? They are no different from the others.

admin March 27, 2012 at 5:27 pm

In which case they must have made an exception because the ONLY way I can login is with a randomly generated hardware based code. That was introduced at the end of last year so I presumed that there was a change in their security protocols/policies. what you are suggesting is either: 1. they’ve made an exception or 2. there is a requirement for manual intervention. An exception need not be an issue but it is important to understand what is happening.

Martyn Shiner March 28, 2012 at 7:05 am

Dennis

Oh yes, agreed, if Barclays allow FreeAgent users to ‘log-in’ without some form of hardware PIN generation then they must have changed their security protocol for this type of user.

The point I was trying to make is that in my experience (of HSBC and Barclays) user interaction via hardware PIN generation is required.

Stuart Bruce March 27, 2012 at 4:15 pm

Good post. Competitors are wrong to “poo poo” the FreeAgent/Barclays deal, it was one of the reasons we signed up with Barclays. I’d already decided I liked FreeAgent and the fact it was cheaper via Barclays than direct was one of the clinchers in choosing Barclays for the new business account. I haven’t set up my feed yet, but I’m hoping it will be as painless as the FreeAgent blurb indicates.

Gary Turner March 27, 2012 at 6:34 pm

Reluctant as I am to show up in the comments of an article about a competitor (and a fine one at that, and congrats on some awesome integration guys) – I should try to clarify the notes about Xero’s HSBC feeds.

We worked directly with HSBC in early 2009 to enable us to launch automatic bank feeds for Xero users with HSBC Business bank accounts. The nature of the engagement means that every day HSBCnet automatically provides Xero with an encrypted update of participating customers’s bank transactions, much in the same way, if not in the precise technical manner in which I imagine Barclay’s and FreeAgent’s integration operates.

Accordingly this integration is not affected by any changes HSBC implemented around human to machine security processs such as the introduction of the PIN devices.

Is it the case that HSBC made an exception for Xero when it introduced PIN devices?I’m not so sure that’s accurate as the integration we built interfaces directly with HSBC’s own secure services framework which obviously sits separately from human interface security models.

Martyn Shiner March 28, 2012 at 7:08 am

Gary

So waht you are saying in order to use Xero HSBC integration the user has to sign up for HSBCNet with HSBC? I know (beacuse I use it) that in the UK this costs £200+ per year for the subscription – whereas HSBC’s SME system, BIB, costs…… £0.

Gary Turner March 28, 2012 at 8:58 am

Martyn, I’m not sure about the different products and services HSBC offer customers, as far as I’m aware there’s only a monthly charge levied by HSBC to receive a bank feed which is £3 per month per account, £36 p.a.

Martyn Shiner March 30, 2012 at 8:19 am

Gary

Thanks for clarifying.

Tony Mosley March 30, 2012 at 9:38 am

As a user of xero and swapping banks to HSBC to avail myself of the automated updates, can say the information is retrieval only and really the requirement of a hard pin is fairly redundant as you can’t actually send money. The time taken between request and delivery of the automated sync is considerable… and in some cases never arrived.

However when it’s set up, it’s excellent and really pays for itself in man hours.

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