9 August 2022

Manual Processes Hinder Growth in Financial Institutions

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User-defined technologies hide risk at a tremendous cost and are unsustainable in the digital battleground. For decades, users have relied on standalone Excel-, Access-, or SQL query-based tools to manually manage business processes at the peril of serious business risks.

In an effort to enhance customer experience, accelerate client onboarding, and improve operational efficiency, financial firms are launching multi-year digital transformation initiatives. This year alone has spurred an increased need for digitalisation among the institutional financial sector.

While the action being taken is commendable, firms will continue to be plagued by operational inefficiency until they are able to fully address the issue. In most cases, the reason digitalisation efforts are not being realised is due to poor data quality and spreadsheet sprawl across an enterprise.

Antiquated ways of working 

The use of standalone Excel-, Access-, or SQL query-based tools to manually onboard customers; aggregate, transform, enrich or reconcile data; and manage business processes has been the standard for decades.

These tools are frequently responsible for performing business-critical tasks or supporting the control functions that govern them. The challenge is, over time, additional requirements have been established.

In order to meet the demand, operations users often rely on their own manual spreadsheet or database to fill in the gaps instead of having their IT department code a solution.

Workarounds lead to operational errors 

This is where manual processes and workarounds enter the scene. There are thousands of these tasks being done daily across the enterprise without a documented version control, and with the typical dependency on one or two staff members to perform the tasks, there is a high risk of user error.

These workarounds also drain productivity. Prone to human and operational errors, they often dramatically slow the onboarding of new clients and products, resulting in reduced margins and poor customer service.

These manual tools feed core payments, compliance, and accounting applications, so when the data that feeds into them is incorrect, the problems compound and infiltrate all associated upstream processes. The result is potentially serious reputational and monetary impact on an organisation.

Impact of manual processes 

There are many high-profile examples of financial firms losing millions, and sometimes billions, of dollars as a result of flawed manual processes, further emphasising the need for establishing user-driven data control and automation.

In addition to the risk organisations face, regulators are also taking notice. Realising these manual tools lack auditability and control, many have established fines or sanctions for noncompliance.

Automation is the answer  

This regulatory pressure, combined with the urgency to improve operational alpha by eliminating process inefficiencies and reducing costs, is compelling firms to evaluate how these long-standing processes can be automated.

By implementing an automation platform, financial institutions are able to transition away from manual and spreadsheet-based tasks and into automated business processes that operate in a controlled and transparent way.

User-driven data control and automation deliver a standardised solution with a single version of the truth, resulting in accurate reports that afford key executives the ability to make sound business decisions.

As the world continues the shift to digital, the ways of working within the financial industry must keep up with the demand. Automating data control and business processes is a crucial step to propel financial firms forward.

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