The Competition and Markets Authority (CMA) have today published their final report on the market investigation into Retail Banking (Including SMEs). In their report the CMA have set out a series of reforms that will require UK banks to develop open API’s that allow their customers to share specific information with trusted intermediaries. The new push towards “Open Banking” is intended to facilitate competition and remove barriers for account comparison and switching activities.
One area that is of particular interest to QuickFile and our users is the accessibility of bank transaction information. Being able to view a real-time picture of your bank account within any accounting system is a huge advantage. Manually exporting, importing and reconciling bank transactions is time consuming and error prone, so any technology that seeks to remove these steps is welcomed.
Currently the methods used for delivering bank feeds are far from ideal. Due to the limited availability of open APIs within the UK banking sector, intermediaries seeking to import data for their users must rely on methods such as “Screen Scraping”. Screen scraping is the process by which a software program cycles through the pages on a website to fill out the forms and extract key information. The downside to this technology is that it is very brittle, i.e. if the bank decides to change their website, the screen scraping application must be updated to understand and navigate the new layout. Furthermore in any automated setting you must entrust your credentials with a third party so that the website can be accessed autonomously.
An API on the other hand is an interface that will allow communications to be made in a structured and predictable way (e.g. JSON/XML), APIs are well documented and changes are scheduled and tested before implementation. Essentially APIs will deliver a far more stable platform for delivery of bank transaction data.
The development and adoption of the open API standard amongst the largest UK banks will likely happen between Q1 2017 to Q1 2018. Transactions history will likely become available towards the end of this time frame.
The full time table for implementation of the proposed reforms can be seen here.
The CMA report is a positive step for addressing what has been a limiting factor for accounting software applications like QuickFile. These days accounting software can effortlessly communicate with all manner of cloud based services. Banking is a key concern and being able to effortlessly stream in bank data will undoubtedly go some way to making the whole accounting process that little bit more tolerable.