ATSA kicked off the 2016 conference with a morning panel that brought together leaders from MYOB, Reckon, Intuit, Wolters Kluwer and Sage, as well as the MD of Xero Australia, Trent Innes.
The hour-long discussion moved through new innovations, the importance of data feeds, the facilitation of collaboration and the future of the cloud. Here are some of the highlights.
On the latest technological innovations
David Smith – director of Smithink, which hosts ATSA – kicked off the morning’s conversation by jumping into some of the newest technology on the horizon, asking Trent to explain Xero’s latest innovations in small business and technology integration, specifically Hey Xero.
Identifying that there are over 50 million small businesses on Facebook, Trent spoke about the importance of building and leveraging the connection between structured data and unstructured data, and making those insights accessible on a daily basis – enabling, for example, a small business to go into Facebook Messenger and ask ‘What’s my current bank balance?’.
When the questions turned to Xero’s use of virtual reality, as seen in its Cloud St campaign, Trent replied, “It’s about using some of the coolest technology, and asking, ‘Has it got a place within the accounting industry?’ We are sharing some virtual reality out on the ATSA stand over the next couple of days.”
On the future of the cloud
Discussing the cloud-accounting industry at large, the panel was asked to respond to a slide in which almost half of respondents expressed some concerns about the future of the cloud. To this, David posed the question: “What do you think we need to be doing to get people to feel more confident and more positive about the cloud?”
“It can be a bit scary to look at one year in isolation,” Trent responded, pointing out that the slide measures data from a single year. When you look at wider trends, it’s clear confidence in the cloud is increasing.
“The adoption of cloud is fantastic,” Trent said. “The actual challenge for the cloud accounting industry is that small businesses are adopting cloud technology far quicker than the accounting industry.”
This is because accounting industries, who are essentially small businesses themselves, have traditionally enjoyed less choice, he explained.
“We’re starting to see this change now. There is far more flexibility and choice, and we will see that rapidly increase.”
And, when leaders suggested that accounting practices are slow to take up cloud accounting in regional areas, Trent disagreed. “Our data shows a different answer. We’re actually seeing a significant uptake in regional areas.”
“It’s a great opportunity for their economy. It connects them to the rest of the world; they can essentially create digital hubs from anywhere.”
On the power of bank feeds
The topic soon turned to bank feeds, where Trent encouraged software providers to continually innovate the data they can provide.
Banking institutions – “from the big ones, all the way through to the challengers” – are working hard with Xero to provide a true source of information and a web of daily bank feeds, he explained.
“Next, bank feeds have got to go beyond daily,” he said, encouraging a deeper industry push. “There will be an expectation that a small business can see real time data showing at any time, where they’re at.”
On the importance of machine learning
The more information we can get through daily data feeds, Trent explained, the easier it will be to input these insights into machine learning.
“We have done a lot of research and we think we can automate nearly 90 per cent of data feeds now with high accuracy,” he said. “We want to make it even easier for small businesses, so they’re not even think about coding their transactions.”
The panel agreed that small businesses in Australia were among the most savvy in the world, and that technology has to move fast to keep up.
“We’re relatively new players in the market,” Luis Sanchez from Intuit said on the subject of cloud accounting in Australia. “It’s one of the most competitive markets in the world.”
On the role of education in technology
With regard to best practice, David asked what practices need to do to get more out of their investment in technology.
Trent was first to respond, saying, “Technology is just one piece of it. The other piece is the people. There is no point bringing the technology, and not actually educating the people. You’ve got to take your people and the team on that journey with you.
“The type of people that we employ is changing, and the way that we build our client base is changing,” Trent explained. “It’s become outcome driven. You can start using technology to ask, should you be using this time to do this kind of service?”
“I agree,” said David Rabie, from Reckon, speaking about the real value-add this can be for accountants.
On enabling integration
Next, David asked the panel where it stands on integration – directing his question to Daniel, from Reckon, who identified the need for best-in-breed software to use open APIs to enable accounting practices.
“When you’re thinking about it from a practice perspective, it’s an area that’s been majorly underinvested in,” Trent added, suggesting that practices need not just an open API – but more investment and choice.
“We want to break apart these large monolithic applications,” Trent said. “You’ll start to see that really change in the next couple of years. Go and have a look at our session on Xero HQ tomorrow.”
On the ability to collaborate
The moderator, David, asked the panel if they’d thought about, the ability for accountants and third-party advisors to all work together at the same time.
“We’ve been thinking about it from day one. It’s the foundation that’s Xero’s built on,” Trent replied. “But more than this, it is constantly developing. We work to a single ledger of financial data that the user can share, always in control, originally with their bookkeepers and accountants. Now we’re expanding that more broadly, with banks and agencies – still with the user in control.”
On the potential of fintech
Finally, when asked about the potential of disruption from fintech partnerships, the panel discussed the legacy process of lending – and the missed opportunities it can present to small businesses.
“You have to enable that connection between clean, beautiful data into a single ledger,” Trent said, moving the talk from problems to solutions.
“You have to be able to provide access to that trustworthy data (always with the client in control) so you can enable the decisions at the heart of an investment.”
Don’t forget to pay a visit to our ecosystem app partners at ATSA, 24-25 October, Palladium at Crown, Melbourne. You can meet Account Kit, BGL, CashFlowStory, Class, Fathom, MyWorkPapers, NowInfinity, smartAR, Smarter Business Processes, Spotlight Reporting, Synergy8 and Workforce Guardian.