Novo recently announced its partnership with Xero in a bid to become the company’s first U.S. digital banking platform partner.
The partnership of the mobile banking platform and the global cloud accounting provider enables Novo customers to update their business deals directly in Xero automatically by receiving a real-time view of their cash flow.
A Xero report found that while half of the small businesses fold up within five years, their likelihood of survival beyond five years increases by 85% when they partnered with an accountant using advanced tools like Xero. With the integration of the two future-oriented companies, cash-strapped small businesses can now increase their accounting capabilities and efficiency, a Novo release said.
Novo co-founder and CEO Michael Rangel said by being the first digital U.S. banking platform to forge a partnership with an established industry leader like Xero; it has launched a new banking model where banks are no longer independent entities. In this advanced model, banks will become “financial watchtowers” that will incorporate common tools small businesses need.
Most small businesses nowadays still spend a substantial amount of time to reconcile their financial statements manually, which increase their probability of committing accounting errors, according to Novo release. The FinTech’s integration with Xero allows entrepreneurs to access the financial health data of their business on demand.
Addressing this accounting problem of small businesses enables entrepreneurs to manage their expenses smoothly and securely on Novo’s banking platform, which would reduce cost and increase operational efficiency, the Novo release added.
The partnership comes at a time of unprecedented growth of small businesses and entrepreneurship, which shows the market’s demand for advances solutions to a self-service business operating model.
With its integration with Novo, Xero has added the FinTech with its existing connections with more than 200 financial institutions all over the world, including Wells Fargo, Capital One, BBVA, and CIBC.
