The future of financial services is steeped in collaboration rather than competition between banking institutions and technology companies, according to Xero CEO and Founder Rod Drury.
Speaking at the company’s Annual Shareholders’ Meeting in Sydney on Wednesday, he outlined the listed cloud accounting platform provider’s global strategy and noted broader trends in the industry.
“It has been a milestone year for Xero. We have executed on all fronts to achieve strong results for the financial year. We’re now well past the startup phase and are pleased to become one of the larger technology companies by revenue listed on the ASX and NZX,” Drury said (pictured).
“We’re into a new phase of innovation as machine learning and artificial intelligence allow us to redefine small businesses computing on our global platform. Our strong revenues allow us to continue to invest to lead this revolution while we manage our cash towards breakeven.”
Xero recently posted a solid set of full-year financial results highlighted by operating cash flow break-even in the second half of the financial year ending March 31 and doubled subscriber numbers in less than two years to pass more than one million subscribers.
The company has passed quarter-of-a-million subscribers in New Zealand and expects to pass half-a-million subscribers in Australia shortly.
“Balanced, strategic investment has resulted in the continuation of world class customer retention levels and operating metrics that are expanding with scale as Xero prepares to pass into positive EBITDA,” Drury said.
“Our focus on building a single, global platform has enabled Xero to onboard more than half-a-million customers in the last two years, 300,000 of which were in the last year alone. Xero’s revenues continue to grow, and network effects are starting to work on the global platform.
“Now we’ve built a powerful and much-loved accounting engine, we have so many opportunities for growth, including how we can use our single code base to service a larger array of businesses around the globe and build more powerful tools.”
Next era of innovation
Xero chief partner officer, Anna Curzon, outlined the importance of small businesses in the global economy, revealing how the company intends to help transform advisors into growth consultants.
“Accounting technology should lead the next era of innovation - the industry has so much to gain from artificial intelligence and machine learning advances which both reduce the cost of compliance and help arm accountants with the tools and skills required to support the world’s small businesses,” she said.
“Machine learning and artificial intelligence are helping unlock the potential of the Xero community’s vast connections and unique dataset to drive the establishment of personalised automation systems for small businesses.
"It’s never been a more exciting time to be in accounting. As small businesses’ contribution to the global economy grows, so does the accountant’s role, as advisors in supporting small businesses who run the world.”
Xero also updated shareholders on its increasing focus on partnering with financial services to collaborate on innovation and data share standards, adding resources to its global team and building relationships with financial institutions right around the world.
“The future of finance is steeped in collaboration rather than competition between banking institutions and technology companies. This is vital to the success of small businesses, and also for the effective future operation of the financial services sector,” Drury said.
“We are working with financial and fintech organisations around the world to securely open up data flows which can help de-risk lending and enable small businesses to access much-needed capital so that they can prosper.
“Working with more than 140 financial and fintech organisations around the world to establish a global financial web, Xero has worked on the strategy of placing our mutual small business banking customers at the centre of everything we do - we want to champion the cause of small business.
“It’s why we now work with top institutions right around the world, from HSBC in the UK and Asia to the Top Four in Australia and Wells Fargo in the US.”