How NAB and Xero have combined to change the banking industry
In an attempt to speed up and make it easier for small businesses to apply for and receive business loan approvals, National Australia Bank (NAB) has partnered with cloud accounting software company Xero by joining their technology platforms.
The agreement between the two sides is the latest example of how banks are looking to become more flexible when working with small businesses. After a secure connection between NAB’s internet banking and Xero’s accounting dashboard was established earlier this month, customers of the two companies are now able to file online loan inquires to NAB directly from their Xero accounting package.
This allows small businesses to immediately connect their loans, credit cards and offset accounts between the two companies, as many of these small business bank customers have found it increasingly difficult to put together all the information needed to receive loans.
Combining these two will make it unnecessary to compile several documents and statements as part of a credit application. Like all other seamless technology providers that preceded it, Xero will earn a commission for every successful small business loan application completed using the software.
The two companies have a long history dating back to when Xero listed in New Zealand back in 2007. At that time, one of its first equity investors was NAB’s New Zealand subsidiary BNZ.
Xero Australia managing director Chris Ridd believes the new technology will benefit both small businesses and the banks by alleviating some of the administrative burden. He also said Xero works with both banks as well as non-banking organisations, and is currently in the process of completing a deal with insurance company CGU.
“What we’re doing is connecting financial service providers into accounting software and allowing customers to get access to these services much quicker,” said Ridd. “In all cases, we’re coming back to data sharing where the customer can work with those providers and can opt into that provider to get access to that provider.”
NAB has also made other investments in the past designed to improve customer experience and make banking easier, such as the company’s $50 million fund called NAB Ventures to speed up its financial technology (or fintech) innovation efforts.
The initiative will run over the next three years and invest in both startups and partnerships in Australia and around the world.
A DBM Consultants survey found NAB has improved its business satisfaction ranking over the last year following its decision to add 200 new bankers to its small and medium-business banking division.