Xero is a worldwide leader in small business finance and accounting software (according to IDC). It provides an easy-to-use cloud-based accounting platform for small businesses and their advisors.
During COVID-19, Xero has been focused on supporting its customers. This includes a number of improvements to help SMEs get access to capital, pay staff appropriately and maintain their compliance obligations. Xero’s Behind Small Business content hub was recently launched to include a range of resources to help get the right information to small businesses at the right time.
Edward Berks is the Executive General Manager of Financial Partnerships at Xero and is known for leading engagement with the world’s most innovative banks and fintechs, to ensure that Xero’s customers can access the most relevant financial services.
What has been the traditional company response to financial technology innovations nationally?
Our mission at Xero is to be the most insightful and trusted small business platform. Small businesses have historically fallen behind larger firms in having access to the best financial services. So we’ve made a strong commitment to make their lives better and level the playing field.
We’ve achieved this through our powerful accounting software platform, as well as our partnerships with 800+ third-party apps and 200+ connections to banks and financial service providers, including banks, lenders, payment service providers and fintechs. As a result, we’ve been able to help businesses get paid faster, make payments more efficiently, access the capital they need, and make critical decisions.
For example, to give business owners a real-time picture of their bills and a better understanding of the impact on their cash flow, Xero has launched Pay with TransferWise. This is a new solution that allows small businesses to pay multiple bills at once.
How has this changed over the past few years?
The fintech sector will always keep evolving, and more companies, from small start-ups to established brands continue to enter and disrupt the space. Everything from payments, to access to working capital, to the way we bank are being refined and reimagined. The upshot of this is that customers are getting the best services and prices, and are able to choose solutions from a huge pool of offerings.
At Xero, it means we are constantly innovating to remain at the forefront of the industry as technology advances. The lending and payment space has been hugely transformed in recent years – and will continue to offer even better ways for businesses to manage cash flow.
Is there anything that has created a culture of change inside the company?
At Xero, it’s two things; culture and nurture. Firstly, we have created a culture of learning and curiosity across the business, where we want people to believe, belong and flourish – and through these principles comes change.
We really want to nurture each and every employee and to make sure that they are enabled to learn in the right way. Things like our training days and online learning models encourage our employees to use their knowledge to bring about change for the better, both for our customers and for their fellow employees.
What FinTech ideas have been implemented?
Xero was born in the cloud, so this is really at the heart of what we do. Before fintech was a thing – back in 2010, we were the first accountancy software platform to use bank feeds to securely import bank transaction data into Xero.
These bank feeds have transformed how small businesses manage their finances and in an increasingly digitally open world, have changed the expectations small businesses have of their bank.
Another is around the power of AI and automation. We want our customers to understand the power of AI and the potential it has to transform their small business with our easy to use platform. This includes things like automated cash flow forecasting, profit and loss and bank reconciliation tools. We’re dedicated to implementing accessible AI technology into our solutions that gives small businesses and their advisors the time back to focus on other areas of their business.
What benefits have these brought?
With the advent of Open Banking, we have since developed a Bank Feeds API enabling banks like Monzo, Tide, Revolut, Starling and Mettle to connect with Xero. These bank feeds are providing huge value in helping businesses make better-informed decisions.
A benefit to providing automation and AI is improvements in access to capital – which is key at this time. With data integrations to support applications with financial services providers globally, as well as providing businesses with the ability to download a real-time financial record that can be shared with the lender of their choice. One customer recently told us that Xero has been a lifesaver when it came to applying for government grants.
And through integrations with banks and payment providers like Stripe and GoCardless, we want to end late payments once and for all. It’s not going to happen overnight. But we are already seeing that if you use Stripe or GoCardless with your Xero account, you can get paid 14 days faster than those that don’t accept online payments.
Do you see any other industry challenges on the horizon?
The most obvious challenge is around how the fintech industry can continue to support those impacted by Covid-19 not just in the next couple of months, but beyond.
Many businesses are currently being kept afloat through grants and government-backed funding. In order to transition to a state where businesses can be self-sustaining, it’s likely that further capitalisation will be required. Whatever schemes are devised, banks and fintechs are likely to be at the fore in administering them.
Can these challenges be aided by FinTech?
COVID-19 has shone a light on the importance of having accurate and up-to-date financial information. Well managed finances are foundational for a well-run business. Fintech is improving the ability of small businesses to get paid, manage cash flow, make informed decisions, and access capital. To this extent, fintech has a huge part to play in supporting the economy through COVID-19 and into a brighter future.
Any final thoughts…
While innovation will continue to be key, there will also be a re-set of how the industry can support business resilience in the months/years ahead.