Automation: the driving force in business intelligence
December 2017 | EXPERT BRIEFING | BANKING & FINANCE
The financial sector is facing a new wave of innovation – emerging technologies have unlocked myriad opportunities and an increasing number of products and services are impacting all aspects of the business world. The financial institutions of tomorrow will see their workforce transformed by developments such as robotic process automation (RPA) and artificial intelligence (AI), to deliver the best possible business outcomes.
With financial services institutions facing tough regulations, RPA has allowed modern banks to meet the demands of security, operational resilience and data quality, while achieving excellent operational efficiency. The benefits of automation can reduce cost-leakage by £4.8m annually, but perhaps even more importantly, automation can benefit business intelligence in its ability to influence corporate decision making.
Next-generation technologies are redefining corporate finance, not only in an operational management sense, but also in the ability to empower finance teams with a holistic and forward-looking view of a business’s financial management process. What we are seeing is the role of the accountant and finance executive being redefined. By harnessing the power of technology, they can redirect their focus toward managing relationships with clients, instead of prioritising the repetitive task of inputting data. Automation is unique in its ability to free workers from monotonous tasks, resulting in higher engagement and giving companies a competitive edge.
However, when considering an overall digital transformation plan, businesses must refrain from being drawn in by over-hyped technologies. With thousands of the latest products being promoted by the media, it is important to remember that these solutions are not universal. The best way for organisations to avoid the media hype is to determine the greatest process challenges across their finance teams. If a product can provide a solution for their pain and rapidly deliver payback on investment, then it can be considered an asset to the business.
The world of finance is becoming increasingly exasperated with admin tasks. Recent research by a cloud specialist revealed that finance directors now spend nearly one day a week on general admin tasks, leading to a drain on resources. But while the problem is prevalent, advances in automation and data software are beginning to enable businesses to generate invaluable insights that can significantly boost productivity. For instance, one company experienced an increase of 250 percent in the number of reconciliations through the use of an automation solution. When selected prudently, next-generation products can empower businesses to better manage financial activity, alongside improving accuracy for planning and budgeting to drive business growth.
One of the best ways to ensure effective business growth is to encourage financial transparency, which provides a more holistic overview of company performance. This can be achieved by automating a company’s financial processes end-to-end, allowing financial experts to move away from manual finance processes that are incredibly time-consuming and which are focussed on maintenance rather than innovation. Automation tools can offer better informed decision making and process improvements that contribute toward positive financial outcomes.
To further refine the process, business leaders must be proactive and identify and assess any key areas within their current finance management practices that could be at financial or reputational risk. It is not uncommon for many organisations to work from siloed financial systems for different business processes, which makes it harder to decipher their financial data. In today’s competitive climate, companies cannot afford to spend the majority of their financial resources on collating and reporting data. Instead, they must look to glean insights from data, allowing them to remain competitive. The challenge of gaining a transparent overview of business expenses can be mitigated by a fully integrated and modular architecture that effectively consolidates information.
Automation tools can allow financial services institutions that are subject to strict regulations, such as banks, insurers and pension funds, to deal with the high demands for data quality, security and operational efficiency. In addition, many businesses are now opting to migrate accounting tasks onto a cloud ecosystem, which allows them to receive the most accurate and up-to-date information related to compliance across processes such as F&A and taxation.
Another benefit of automation is its ability to produce increased data quality by reducing human errors. Errors in calculation and the manual input of incorrect data into systems can be very costly for businesses, with net profits at stake. The technology replaces all paper from the finance and accounting process and electronically captures each transaction throughout its entire life cycle. This eliminates the risk of information being lost, and in the case of urgently needing to extract data, the status of all transactions can be accessed with one click. Brand value is crucial in financial management, and so errors must be avoided at all costs.
The rise of innovation within the financial services sector is translating to cost savings of up to 75 percent. But it is important to remember that automation does not seek to replace humans in the workplace due to its cost reduction abilities. Instead, it will help businesses reinvent and prioritise the way in which their financial teams work; rather than allowing them to work less, it will empower them to work more broadly across different key aspects of the business.
Automation ensures that companies retain their most valuable asset – time. For example, it has been reported that automation-led transformation has helped reduce monthly journal posting cycle times by 65 percent. It is this kind of innovation that allows finance teams to spend more time analysing their data, rather than focusing on its collation and organisation.
To further make the most of innovative tools to boost business-critical functions, forward-thinking staff that possess the expertise to derive interesting and actionable insights from data sets, in order to propel the business toward financial success, will be required.
In the midst of the ever-evolving digital landscape, financial services institutions must become accustomed to the constant development of machine learning and the doors it opens for business development and growth. Supporting financial teams with automation tools will bolster the creation of new products and services, while significantly increasing value.
Bhupender Singh is the chief executive of Intelenet Global Services.
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