An app connected to a Xero file can see client ledgers, payroll, staff names and bank details. At Toby we suggest asking the provider seven questions first, getting the answers in writing, and keeping them with the client file.
Why the answers are yours to collect
Connecting an app passes data to another business, and the Office of the Australian Information Commissioner's guide to securing personal information is plain about where that leaves you: "When you outsource any of your personal information handling to a third party (including to a cloud service provider), and you continue to ‘hold’ that information, you will still be subject to APP 11." For cloud services, it says reasonable steps "may include robust management of the third party storing or handling your clients’ personal information, including effective contractual clauses, verifying security claims of cloud service providers through inspections, and regular reporting and monitoring."
Whether the Privacy Act applies to your practice or business, and what it asks of you, is a question for the OAIC's guidance and your own adviser. The questions below are worth asking either way.
What can it read, and can it change anything?
Ask the provider to list which parts of the file the connection lets it read, and whether it can create or change anything: invoices, journals, contacts or pay runs. An app that only reports on a file has no reason to write to it. If it does write, ask what, and whether you approve each change first.
Where is the data held, and who else receives it?
The OAIC describes cloud computing as "data being stored and processed by the cloud service provider". Ask which country the data is stored and processed in, and which other businesses receive it, including any model provider the app sends text to.
The country matters. The OAIC's guidelines on cross-border disclosure say that before an APP entity discloses personal information to an overseas recipient, it must take reasonable steps to ensure the recipient does not breach the Australian Privacy Principles. Where it does disclose, the entity "is accountable for an act or practice of the overseas recipient that would breach the APPs", subject to exceptions the guidelines set out.
Is any of it used to train a model?
Ask whether your file, your questions or the app's answers are used to train a model, by the app maker or by any model provider it calls, and where the terms say so. We set out how to read those terms in what "trained on your data" means, and how to check.
What does it keep, and for how long?
An app may copy data out of the file to run its reports. Ask what is copied, how long it is kept, and what happens to it when you disconnect or close the account. The same OAIC guide covers the reasonable steps entities take to destroy or de-identify personal information they hold once it is no longer needed.
What happens if something goes wrong?
Ask how the provider would tell you about a breach and what the contract says. The OAIC's guide notes that where APP 11 applies to you, you are also subject to the Notifiable Data Breaches scheme "even if it is the third party who suffers the eligible data breach". Its checklist for third party providers asks whether you have "included terms in the contract to deal with specific obligations about the handling of personal information and mechanisms to ensure the obligations are being fulfilled, such as regular reporting requirements".
How do you switch it off?
Ask how to revoke the connection, whether access stops at once, and whether anything the app has already copied is deleted.
The seven questions
- What can the app read in the file, and can it create or change anything?
- Which country is the data stored and processed in?
- Which other businesses receive it, including any model provider?
- Is any of it used to train a model, and where do the terms say so?
- What is copied out of the file, how long is it kept, and what happens to it when you leave?
- How would you hear about a breach, and what does the contract say?
- How do you revoke access, and does it stop at once?
How we answer them at Toby
At Toby we publish our answers on our security page. A Xero connection is read-only and authorised by you in Xero. Toby reads the accounting and payroll data the checks need and "writes nothing back to your file". You can revoke the connection in Xero at any time, and it stops that moment. The servers, the database, the encrypted store for Xero tokens and the logs run in the AWS Sydney region. Tax file numbers, bank account numbers, salary figures, employee names and raw organisation identifiers never reach any AI provider, and nothing you send to Toby is used to train a model. Ask us the same seven questions at hello@tobyai.io.
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Related reading
For what happens to client data once AI software is involved, see where your data goes when you use AI in a practice.
Sources
- Office of the Australian Information Commissioner, Guide to securing personal information. Supports the points on outsourcing and cloud providers, destroying or de-identifying information no longer needed, breaches at a third party, and contract terms.
- Office of the Australian Information Commissioner, Australian Privacy Principles guidelines, Chapter 8: APP 8 Cross-border disclosure of personal information. Supports the points on disclosing to an overseas recipient and accountability for its acts or practices.