Banking News

Xero targets Asia’s booming digital finance

(7 February 2019 – Asia) Xero CEO Steve Vamos took up the challenge of running the New Zealand-domiciled, Australia-listed cloud-based accounting services provider with a strong foothold in Singapore in his belief that accounting and bookkeeping functions will be free from human intervention in the long run

Xero's cloud platform helps SMEs to keep track of their cash flow by providing real-time financial data by partnering with banks and financial service providers. Xero’s tagline “when small business is beautiful business” speaks well about the firm’s focus on small and medium-sized enterprises.

“In the future, accounting and bookkeeping should be fully automated and routine tasks will give way to more strategic analytical work,” Vamos told FinanceAsia in an exclusive interview. “Ideally, accountants and bookkeepers should be switching to new roles that deliver more value and service to customers, such as advising clients on how to improve operational efficiency,” Vamos said. Asia, which saw an unprecedented rise in the number of startups and SMEs in recent years, is naturally the firm’s next big target. “We see massive business opportunities in Asia, not only because of the large pool of SMEs here, but also the fact that it is an underpenetrated market for cloud-based financial services,” Vamos told FinanceAsia. Asia’s overall penetration rate for cloud-based accounting software stands at around 20%, which is much lower than about 40% in Australia and New Zealand, according to Vamos.

Xero is working on new products from the financial and transactional data collected from its clients. For instance, Xero is developing new functions to help their clients with e-invoicing and e-tax filing, as well as accessing borrowings more cost-effectively. It is already advising the Singapore government on implementing these SME finance initiatives. “To me, people are furious [about unauthorised access to private information] not because of the data breach itself. They are unhappy because they are not informed beforehand,” Vamos said. “As long as companies are well educated about how we use their information and the benefits they would bring to their business, I am confident many companies will be willing to share their information.”