Did you hear about the big announcement about Wells Fargo and Xero? Wells Fargo is working with Xero to set up a direct connection between Xero’s accounting software and Wells Fargo banking product. What exactly does this new integration mean? And what does this big announcement really mean for the small business owner?
As of now, Wells Fargo (and many other banks) connect with Xero from a third party service called Yodlee. This new integration will take Yodlee out of the picture and will provide a Wells Fargo bank feed directly with Xero instead. The biggest benefit to take away from this is improved security. This is good news because we all want greater security for our sensitive information. A direct connection will also lead to more accurate records in Xero.
Hilary Burns of the Charlotte Business Journal wrote here:
“The San Francisco-based bank compares the new data-sharing method to how some websites, such as Spotify or Airbnb, let users log in with Facebook. The platform eliminates the need for Xero customers to share their Wells Fargo usernames and passwords as well as the need for the software firm to store them in order to retrieve Wells Fargo account data.”
This is the first time a big bank in the US is enabling an accounting application to seamlessly access its banking data. This could be the first step to something much bigger. Where will this lead? Perhaps eventually we will be able to have data going back and forth between our bank and our accounting software. Maybe our accounting will become more of an extension of our accounting platform and visa versa. The idea of managing your banking and accounting from one spot is very appealing.
The future is bright for cloud accounting, especially Xero users. At first it may be hard to understand what the big deal was about this “big announcement” but it really means that this could open up much more for us in the future. It’s an exciting time to be in the cloud!