THe Current Situation
What are Bank Feeds?
Essentially, a “bank feed” is where your bank will send transaction data to your accounting software.
Your bank would have entered into an agreement with each software provider to share the agreed upon data (pending consent from you) – but importantly, an accounting software package needed to negotiate access to bank data (e.g. what fee the software would need to pay the bank, and how much data could be shared).
The primary benefit of using bank feeds is that it saves you the time of manually entering this transaction data (e.g. date, description, amount), but the flow on effect is also that the data is more accurate (because humans make mistakes, be it using the wrong date, typing 23 instead of 32, and so on).
The reliability of bank feeds have varied from software to software and bank to bank, because it was essentially a custom connection created for each and say if your bank updated its security or log in screen, it would break the connection with your software. Some software vendors manage this better than others (we’re looking at you QuickBooks…).
QuickBooks Online Customers
We’ll note that we currently have a number of clients experiencing issues with bank feeds in QuickBooks Online (“QBO”), which is what prompted us to write this article. If you are a QBO customer, we suggest you switch your bank feed to an open banking feed as soon as possible (however, as of the time of writing, only the 4 main banks are supported). If you can’t, then you unfortunately need to “wait it out” or change software. If you want to discuss what your options are, we are just a phone call away.
Types of Bank Feeds?
At the moment there are a couple of different types of bank feeds:
- Direct feeds – where your software has made a private agreement with your bank to share certain data. Your software would have built the sign-up functionality to suit your bank’s individual requirements, and in that agreement your bank will send transaction data to your software each night across its API / secure connection;
- Screen-scraping feeds – where your software requires your internet banking details and it will log in each night and download transactions;
- Third-Party feeds – where the bank feed is obtained from a third-party (such as Yodlee), however this is less regulated than other options; and
- Open banking feeds – which is the new type of feed we are going to discuss in more detail shortly.
The process to enable a bank feed can be different from bank to bank and software to software (depending on what agreement they have). Some banks have a nice easy setting inside internet banking that you simply switch on and off, and some banks require a hand-signed form sent to them. Some software will do what they refer to as “data scraping” instead of a direct bank feed, and they ask for your internet banking password so their software can log in and “scrape” the transactions details off the screen.
Why the Need for Change?
A few years ago, the Government legislated that banks must allow customers access to their data – and this has effectively created a regulated “Open Banking” system, including set rules, structure, and security behind the sharing of this data. This “one size fits all” kind of approach will help ensure that all banks give the same data under the same secure conditions, and it will ultimately make it easier for software to make a connection to each bank as they don’t need to negotiate terms with each bank.
Unfortunately, existing accounting software providers built their software before these new regulations were in place, and are now in the position of needing to update their software to fit with the new type of connection.
Moving To Open Banking Feeds
How Accounting Software Packages Are Adopting
Instead of re-building their software to align with the open banking protocols, many accounting software packages will be using third-party platforms to manage your bank feed – which means users are going to have to not only re-authorise, but do so via a third-party.
This means that when you create a bank feed under the open banking system, you will be redirected to that third-party to set up the connection to your bank. It will feel a little more disjointed because of this, and will no doubt result in you needing to click more “I agree with the terms” boxes.
The Immediate Impact On You
From the end-user’s perspective, the following things will change:
- You will at some point be asked to re-create a connection between your accounting software and your bank (i.e. switch over to the new “open banking” feed);
- This may involve setting up an account with the third-party provider (for example, some are using ACSISS for this);
- Business account owners will need to nominate a representative to act on their behalf – this will usually be done from within your internet banking login; and
- Users will be required to provide regular authorisation for the bank feed to continue.
The Ongoing Impact On You
That last dot point above is really important to note – under the regulations, re-authorisation must occur at least annually – which is something not currently required for direct bank feeds and we see as a potential big change for clients. If you don’t re-authorise when asked, the bank feed will disconnect and data won’t flow to your software, resulting in additional time and effort to get that data in your software.
When Will This Change Occur?
Each software is migrating to open banking feeds on different timelines, which isn’t published clearly by each software vendor. Our best guess is as follows:
- Xero – No timeline has been given by Xero. Xero invested heavily in creating direct feeds with most banks and seems hesitent to move away with a “if it ain’t broke don’t fix it” mentality. Open banking feeds do allow for more information and quicker delivery (i.e. within minutes of the transaction occurring), so at some point there will be competitive pressure for Xero to switch;
- QuickBooks Online – Have started with the 4 main banks and will expand soon;
- Reckon One – Currently offers opening banking connections, and it seems to be its preferred type of bank feed; and
- MYOB – Starting March 2026, but we expect this to be a slow transition.
Can You Help?
To a degree…
We can’t authorise your bank to send your data to your software on your behalf – so the help we can provide is limited to guiding you through the process. Each software company will have documentation and help guides on how to connect, and we would recommend that you have a look at the help files of your particular software before reaching out to us.
This may also be a good trigger for you to review your options as there may be a better solution out there. We’re finding this to be the case for businesses using solutions like MYOB AccountRight (the $150 or so per month subscription) who could easily cut that fee in half by moving to another software vendor. Cheaper isn’t always better, they key is making sure the features that you need and use and covered.