NetCash and Open Banking

OVERVIEW 

NetCash is an embedded Suiteapp within NetSuite that simplifies and automates the bank reconciliation process. Using cutting edge technology and API integrations, NetCash provides NetSuite users with visibility into their cash balances on a daily basis to make more informed financial decisions. 

Here at Netgain, we are champions of open banking. We have partnered with several third-party providers in order to connect with as many banks as possible. Due to the various partnership options, we are leading the business for bank connections and coverage.

However, it is important to note that we do NOT connect to every bank. Banks in many parts of the world have control over who they share their data with and have not yet chosen to adopt this modern technology. Therefore, if a bank does not allow third-party API connections, we will be unable to connect to this bank. 

We often get questions about open banking and how NetCash imports financial data so we developed this article to answer these questions. 

Frequently Asked Questions

How does NetCash import financial data? 

NetCash uses application programming interfaces (APIs) to get data from banks, using the open banking infrastructure.  

NetCash does not use file parsers or screen scrapes.  

What is open banking?  

Simply put, open banking gives you the ability to share your financial data with third-party providers (TPPs) using application programming interfaces (APIs) to access innovative financial service experiences. Traditionally, only you and your bank could access your financial data.  

Open banking allows you to share that data with another financial service provider—either a different financial institution or TPP—to empower you to use your own data for your own benefit. These TPPs can include a wide range of financial technology (fintech) companies, currency exchanges, merchants, and other digital platforms. 

Open banking replaces outdated methods for sharing financial data, like file transfers and parsers. 

Learn more: What is open banking? Everything NetSuite users need to know    

What are file transfers? 

Banks will send data files to their consumers to share banking information with them. The most common format is a BAI2 file, a cash management reporting standard that provides sets of codes that identify the account activity or balance being reported. However, there are differences in BAI2 files’ format and structure between banks, and banks are not required to send files in a specified format. 

What are file parsers? 

A parser is a program that reads a file and converts its contents into another format. In this case, a parser would transform the data sent by a bank into another format that can be uploaded or pushed into another system like an enterprise resource planning (ERP) platform. 

What are screen scrapes? 

Screen scraping involves extracting data from the bank's website by simulating user interaction and capturing the displayed information. 

Why does NetCash use open banking APIs as opposed to file transfers/parsers?  

APIs are a consistent way to pull data into a designated format every time with minimal setup. File transfers require the bank to send the file, and banks don’t always fulfill these requests. You can make a general parser, but the data will likely not be consistent across banks, so parsers will need to be built for each bank.  

By using open banking APIs, NetCash can provide real-time data access and automate processes like bank reconciliation.  

What countries use open banking? 

The availability of open banking APIs varies by region.  

  • Australia: The Consumer Data Right (CDR) legislation requires all banks in Australia to provide API access to their clients for all account types. You can read more on the Australian Competition & Consumer Commission website.  

  • Europe: The UK and European Union have various open banking standards, including the Payment Services Directive (PSD3) in the EU and open banking regulation by the Financial Conduct Authority in the UK. Therefore, there is some open banking connectivity in this region, but it’s not mandated as it is in Australia, so not all financial institutions offer it.  

  • US and Canada: There are no legal requirements in the US and Canada right now, though proposed legislation to be finalized at the end of 2024 will likely mandate API connectivity for consumer [non-business] accounts at financial institutions in the US. Therefore, API connectivity is this region is available but relatively limited, especially for business accounts, which have not been a focus of banks. 

  • Latin America, Africa, and Asia have little to no API connectivity. There are vastly different banking regulations across these regions.  

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