Small businesses will be able to access their banking data within their Xero accounting platform almost instantly.

Leading small business accounting platform Xero has today announced its new open banking API, called the Xero bank feeds API. Australian small businesses will be able to use this API to facilitate a seamless flow of data between their bank or financial institution to their Xero platform.

Small businesses will be able to access their banking data, such as their transaction history, almost instantly from within the Xero platform without needing to log in to their bank's Internet banking or mobile app. The data will flow into their Xero platform automatically, dramatically reducing the time spent looking up past transactions from a number of different platforms.

Thanks to the integration, accountants and bookkeepers will have access to a full set of accurate and up-to-date data when working with their small business clients. It will also help small businesses manage their day-to-day cash flow, by having a more holistic picture of their finances from within the one platform rather than diluted across several.

Open banking is all about giving consumers control over their own financial data. At the moment it's hard to get a complete picture of your finances within one platform, as banks and other financial institutions are reluctant to share your banking data with other parties. The banks will be forced to start sharing your data, at your request, with other parties from July 2019.

But this doesn't mean they can't begin to introduce open banking sooner. In January, personal finance app Pocketbook became the first Australian fintech organisation to connect with Macquarie Bank's open banking and data sharing platform, which it launched in launched in September 2017.

Xero general manager of financial services products Ben Styles said, "With the Xero bank feeds API, all types and sizes of financial institutions can integrate with Xero to deliver an optimal customer experience and give small businesses the information they need to make crucial business decisions in one platform. This is an evolutionary leap in how banks, payment providers and lenders can interact with their small business customers through Xero."