Intuit first to deliver real-time, error-free transactions with Open Banking

Accounting Software

Intuit - Composite Applications, Domain Capabilities, Core Capabilities, Essential Capabilities

Intuit announced at its QuickBooks Get Connected in Sydney that QuickBooks would be the first accounting software in Australia to deliver all bank feeds using the Open Banking framework. Under federal legislation, Australian consumers now own the right to access their own transaction data and share it with third parties. 

This means banks are obligated to provide transaction data free of charge – and in real time. This is a watershed moment for accounting. Every accounting software will switch to this method. Here’s what it means for users.

  • The legislation compels every financial institution to provide bank feeds. We have just leapt to 100% coverage of banks. 
  • The current generation of bank feeds was available for only some types of accounts. Open Banking covers many more (all?) types of accounts, including loans, credit cards and trust accounts.
  • The feeds update in real time. Accounting software may not display it in real time, but it will be possible. 
  • The feeds will be 100% accurate. If the banks send data with errors, they have to fix it. Regulators will be watching this. The goal is for you to receive in your accounting software the same data you see in your online banking account. 

It means that accountants and bookkeepers will never need to ask a client to send a bank statement to check the balance ever again. Hallelujah. 

What will the experience be like with Open Banking feeds? “Once you've connected you'll have access to a full year's worth of historical data. And the best thing about Open Banking is that it means no more screen scraping. You'll never have to worry about duplicate transactions ever again,” promised Andrew Smith, Director of Product, International. 

Intuit is the only vendor to be accredited under Open Banking; this comes with certain obligations which make it a tougher decision than you’d expect. However, Intuit is using SISS Data Services to deliver the feeds to QuickBooks. 

Intuit says the Open Banking feeds should be up and running by Q1 2024. Kudos for being the first to implement. 


Farewell to scraping 

Open Banking also means accounting software vendors can ditch the clunky and unreliable practice called “screen scraping”. The accounting software company asks the small business owner to share their login credentials for their bank account, then takes a screenshot of the statements once a day and uses optical character recognition to turn the image back into a list of transactions. 

This process inevitably created missing or duplicate transactions. It wasn’t a valid replacement for the bank statement, which is why accountants have until now always asked to see a statement once a month or quarter. 

Intuit and Xero both use screen scraping to get access to bank feeds to varying degrees. MYOB never had to use screen scraping after it bought BankLink, a bank feed aggregator, in 2013.

The banks never liked this process because sharing login credentials is technically a breach of their terms and conditions. However, they haven’t protested too loudly because it reinforced the case for Open Banking. And Open Banking takes a lot of control and leverage from the banks and puts it in the hands of consumers.

Open Banking has been a hugely expensive and complicated exercise to make a reality. It may take a while to iron out the kinks. Banking systems are so large and clunky that the banks themselves struggle to create a real-time picture of their banking data. 

Intuit takes on mid-market

The product updates for QuickBooks itself were relatively minor, apart from some interface upgrades. The annual QuickBooks Connect conference kicks off in Last Vegas in two weeks, so Intuit Australia had to keep most of their powder dry.

The big news was that Intuit has also released its mid-market solution, QuickBooks Online Advanced, in Australia. The mid-market is one of Intuit’s five big bets (the others are AI, marketing, finance/payments and “experts network”). 

QBO Advanced is a beefed up version of QuickBooks. It has granular user permissions so that you can prevent sales people from looking up each other’s salaries; more than 500 custom fields for more detailed reporting; and cross-team and department approval processes. 

The announcement of the product was not as exciting as the commitment to servicing the midmarket, said Lars Leber, vice president Australia, emerging markets and global expansion.

“It's actually the power of the commitment that Intuit has around the mid-market itself. We're investing a lot of effort and resources to innovate in this space.”

Given Intuit’s substantial investment in AI, and its rapid deployment of a generative AI assistant built into its five main products, Intuit could really shake up the lower end of the mid-market. Obviously a beefier QBO is never going to compete with the modular NetSuites and Sage Intaccts, but Leber believes there is a big market of companies that have outgrown QuickBooks and yet don’t want to spend big on an ERP. 

“There's a very underserved segment. If you're starting to have team members with specific roles and you don't want to invest hundreds of thousands of dollars on a customised ERP. I think we're able to serve customers between 20 and 100 employees and moving forward is actually a segment where there are very few solutions out there,” Leber says. 

The difference in price may not be so great. Cloud ERPs have fallen dramatically in price and can be configured and installed for $20,000 or less. However, QBO Advanced will have almost no change management burden and associated risk, and will be a very attractive offer for the small end of mid-market. 

Image credit: HelloPegg

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