The problem with bank feeds
Arrghh bank feeds! Have you found yourself pulling all your hair out over bank feeds? Or are you new to bank feeds and want to find out what they are, and how they work? In this article, we’ll cover all the ins and outs of bank feeds, what they do, and why you need to be super careful about using them.
Bank feeds, also known as bank data feeds or screen scraping, refer to the integration of your bank account data with accounting software such as Xero, MYOB or Rounded. Banks feeds are offered by many Australian banks, and they allow you to import transaction data from your online banking, into your accounting or budgeting software. Bank feeds were created to replace the need to manually upload or import transaction data from CSV files or bank statements. Accountants and bookkeepers rely on bank feeds to see your transactions and calculate your taxes.
While on the surface bank feeds can be convenient and save time, they do pose significant security risks that you need to be aware of. To pass your transaction data between applications, software like Xero or MYOB requires you to give you bank login details so that they access your financial information. This means that your accounting software can see all the transactions in your bank accounts, including account numbers, transaction amounts, and merchant names. If Xero or MYOB experiences a data breach or is hacked, this sensitive information could be accessed and potentially used for fraudulent purposes.
Another security risk with bank feeds is that they rely on the security of the accounting software or app that is receiving the data. If this software is not secure or is not regularly updated to fix vulnerabilities, it could also potentially be hacked, and sensitive financial information could be accessed. As a result, many banks have introduced terms and conditions that may prevent you from being reimbursed for fraud losses, where you have given data access to third-party applications. Due to this, you should always be cautious about granting access to third-party apps and it is a good idea to regularly review the apps that have access to financial information and to revoke access for any that are no longer needed or trusted.
In addition to the security risks, bank feeds are notoriously difficult to set up. In most cases, you will need to complete a form and it can take weeks to be approved. Even with Commonwealth Bank, customers have reported waiting weeks for a co-signed bank account to be enabled in Xero. Once the bank feed is established, data is not pulled in real-time leaving you with data gaps, and there are other common issues including duplicated transactions, missing transactions, incorrect amounts appearing on statements, and broken connections between accounts and software applications. These issues can cause significant confusion and disruption to your business.
To troubleshoot problems with a bank feed, you’ll need to make sure that everything is properly connected on both sides. You should start by logging in to your accounting software and checking the linked account is still valid. Then check if there have been any recent updates to your online banking, including a new design, or perhaps a change of password. Once everything is checked properly, you can try refreshing the feed or resetting it altogether if necessary. If this doesn’t work, then reach out to customer support for help resolving the issue as soon as possible.
If you are fed up with bank feeds or are concerned about information security, then using a product like Thriday could be the answer. Instead of bank feeds, Thriday replaces the need for two different systems by having everything available in one platform. When you sign up to Thriday, you get create business bank accounts* and Visa Debit cards*. From there, as you earn money or spend money, your bookkeeping, accounting and tax is compiled and available for you in real-time. There are no duplicate or missing transactions, and there are no data gaps. As soon as a transaction occurs, you can see it. In addition, there is no need to share sensitive details with a third-party app, Thriday is the one and only platform you will need.
Bank Feed FAQs
What are bank feeds?
Bank feeds are an automated way to import bank transactions into your accounting software, allowing you to reconcile your accounts and keep your financial records up to date.
How do bank feeds work?
Bank feeds work by connecting your bank account by using your login. Once connected, your transactions will be automatically imported into your software on a regular basis.
What are the benefits of using bank feeds?
Using bank feeds can save you time and reduce errors in your financial records by eliminating the need to enter transaction data manually. It can also help you stay on top of your cash flow and make better financial decisions.
How do I set up bank feeds for my business?
Setting up bank feeds will depend on your accounting software and the bank you use. In general, you will need to provide authorisation for the feed and follow the setup instructions provided by your software or bank. Some providers may charge a fee for bank feed access.
Overall, while bank feeds can be convenient, it is important for users to be aware of the potential security risks and to take steps to protect their financial information. It is common for bank feeds to have errors, are not accurately import all transaction data, leaving you with a confusing picture of your business. If you are frustrated by bank feeds, have security concerns or have had issues in the past with setting them up, then check out a platform like Thriday, which provides an all-in-one banking, accounting and tax solution.