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.