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Embracing remote work: Why working from home has a positive impact on Finance.  

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Paul Wooldridge, Future Workplace Practice Lead at SoftwareONE UK 

 

When lockdown hit back in March 2020, the numbers of remote workers changed overnight – and Financial Services Institutions (FSIs) also made the high-speed switch from office desks to kitchen tables. This was a very risky move for such a highly regulated industry. Two years down the line, hybrid and remote work have become a staple of work culture. All sectors have embraced hybrid/remote work structures because of employees’ changing work demands and the digital working landscape.

Studies from ACAS show that 3 in 5 employers (60%) have seen an increase in hybrid working staff compared to before the pandemic. As a result, businesses across all sectors have had to invest in technology, such as cloud computing, that will enable their employees to work outside the office. The financial sector, including banks, is no exception. With the current state of the economy and the continuous rise in inflation, banks must invest in the right cost-efficient technologies in order to enable their employees to work to the best of their ability.

Implementing a remote work infrastructure shouldn’t be left to chance. With little prior exposure to remote practices, FSI employees made a cut-and-paste transition from in-person office workings to our new virtual working structure, and simply had to adapt along the way. FSIs should use the knowledge obtained during the lockdown to help build on proven successes and focus on those areas that weren’t developed with remote work in mind. They must analyse, adapt and implement or they risk falling behind.

Top Talent wants the Top Contract.

Flexibility. A simple concept. A concept that is in high demand regarding recruitment amongst the next generation of financial workers. In fact, a recent YouGov survey(https://yougov.co.uk/)  found that 77% of finance professionals are opting for a four-day working week and over half of young employees stated they would leave their job if they were forced back into the office full-time.

Remote work is more than just a luxury for the next generation of workers—the younger generations see that they can get the same work done without the added stress of commuting to and from work. Now that they have realised the benefits; many are opposed or full-out unwilling to go back to office work.

As Boomers take their retirement, Millennials step into leadership roles and Gen-Zers continue to make up more and more of the workforce, FSI leaders need to pay attention to changing trends when it comes to what these younger generations want—or they risk missing out on and not retaining top young talent.

Using technology to improve hybrid productivity.

In 2022, Financial Services Institutions recognise the importance of digital technologies as a powerful lever to improve their profits, improve regulatory compliance, and transform their customer experience. As we look to 2023, and we all brace ourselves for the pending devastations brought on by the economic crisis, we expect digitisation to play an even more central role, as banks find innovative ways to serve their customers during the crisis.

Financial Institutions that leverage technology, such as cloud computing, increase their operational agility more than those that devote IT resources to managing their infrastructure. The Cloud increases the productivity of finance workforces by allowing them to devote more time and energy towards advancing new projects, instead of constantly handling traditional IT issues and upkeep. Another benefit of the cloud is the lower initial costs compared to the numerous costs of acquiring traditional IT equipment. And, if an FSI requires more bandwidth at any time, a cloud-based service can meet that demand quickly.

When reviewing IT budgets, executives need to consider critical questions on how to keep the business running, how to identify the goals that need to be achieved, and how technology can help better facilitate. Cloud computing is here to stay, and if financial organisations aren’t already strategizing and optimising their cloud investment, then they are likely falling behind their competitors.

Cloudy with a chance of virtual meetings.

Recent research found that 9 out of 10 financial institutions have a digital transformation initiative in place, and 80% of them believe they’re not even halfway done with transformation efforts. Many of these FS firms turn to hybrid cloud as it can enable them to reduce their operating cost and enhance their data security simultaneously by splitting their data between on-premises storage for sensitive data, and cloud storage for less sensitive data. This helps FS firms adhere to changing regulatory reporting requirements in multiple operating jurisdictions.

In turn, these solutions help FS firms conduct liquidity and risk calculations and monitor data to detect fraudulent activity. Ultimately, by using hybrid cloud, financial service organisations can maintain and support their legacy systems while simultaneously taking advantage of Cloud technology.

Cloud computing gives finance professionals the agility to access important data instantly. Leveraging the data seamlessly from wherever they are working to maintain exceptional customer experience, not to the detriment of the firm’s productivity. Whether it be responding to the ever-changing customer needs or competitive dynamics, cloud computing allows FSI employees to access and retrieve important wherever and whenever it’s needed quickly and securely.

Business

Accounting Automation in the Future

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Accounting automation is the process of streamlining repetitive tasks in financial processes. For example, some processes like invoicing are time-consuming and repetitive. Automation can reduce manual labor and save businesses both time and money. Also, it helps improve accuracy, reduces errors, and provides more accurate financial reporting.

Accounting automation in the future will be increasingly important for businesses to stay competitive. But every new change comes with both advantages and challenges. Let’s dive in to get ready for this future trend.

 

Potential Future Benefits of Accounting Automation

Increased Efficiency and Cost Savings

Accounting automation is a great way to increase efficiency and cost savings. For example, AI bookkeeping uses advanced algorithms to automate many accounting tasks. So, companies can track expenses, prepare financial reports, and more using AI.

It reduces the time needed for manual entry. So, businesses can spend fewer labor hours on tedious processes. They can increase efficiency by freeing up resources for more strategic work. It also helps reduce errors and inconsistencies associated with manual processes. So, the cost of compliance is lower because of greater accuracy.

 

Improved Accuracy and Reliability

Accounting automation can improve accuracy and reliability in accounting processes. For example, Automating bank reconciliation is less prone to errors from human mistakes or miscalculations. You can automate the process to identify discrepancies between the bank statement and accounting records. It helps to ensure that financial reports remain accurate and reliable. So businesses can take corrective action faster than processing data manually.

 

Streamlined Business Processes

Streamlined business processes involve eliminating unnecessary steps, reducing paperwork, and automating repetitive tasks. This allows businesses to focus on higher-value activities, such as developing new products, improving customer service, and developing strategic plans for the future.

 

Making a Better Decision

Accounting automation can enhance decision-making in 3 ways.

1. It enables businesses to access real-time information from multiple systems. So they can identify trends for better decision-making.
2. Automated accounting also helps with forecasting, budgeting, and auditing tasks. It enables businesses to be more proactive in their decision-making processes.
3. Also, automated accounting tools can integrate with enterprise resource planning (ERP) systems. They can manage data across the enterprise and make concise decisions that are favorable to the company as a whole.

 

Increase Customer Satisfaction

Accounting automation can help businesses increase customer satisfaction by streamlining their processes and providing a more efficient customer experience. For example:
4. Automated accounting systems can automate tedious manual tasks such as invoicing, data entry, and payroll processing. This allows businesses to focus on other aspects of their operations that are more important for customer service.
5. Automated accounting systems can also provide customers with more accurate and timely financial information. The information can help them make better decisions about their finances.
6. Also, accounting automation enables businesses to respond quickly to customer inquiries. It helps reduce wait times and improve the overall customer experience. So, you can build better relationships with their customers.

 

Improved Accessibility

Accounting automation takes place online or comes with cloud-based solutions. So, you can access your information and do your job from anywhere instead of being confined to one spot.

 

Challenges to Implementing Accounting Automation in the Future

Cost of Technology Infrastructure Upgrades

Automating an accounting system often requires businesses to invest in new hardware and software, such as servers and other associated equipment. These upgrades come with a hefty price tag that may be difficult for small businesses to afford.

There are also extra costs, such as installation fees, setup charges, software licensing fees, cloud storage costs, and maintenance fees.

 

Training Requirements for Staff Members

Accounting automation involves using advanced technology to automate certain processes. So, it creates a need for trained staff members who can handle the new technology. Training requirements vary depending on the type of software used.

Some common training includes record-keeping procedures, software applications, and troubleshooting skills.

 

Regulatory Compliance Issues

Accounting automation can be a time-saver, but it also requires firms to be aware of the applicable rules and regulations. Companies must ensure that their automated systems are compliant with relevant laws and regulations such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and other applicable accounting standards.

Besides, they must also comply with legal requirements related to taxes, financial statements, and other reporting obligations.

So, businesses must consider the complexities of regulatory compliance when automating accounting.

 

Security and Data Protection Concerns

As businesses move their accounting processes to the cloud, they are exposed to a wide range of potential security risks. Data breaches can cause significant damage to the business’s financial and reputational integrity. Besides, the complexity of automated accounting systems can make it difficult to identify and detect suspicious activities or errors in the system.

To ensure data is kept secure, businesses must have strong measures in place to protect against unauthorized access, encryption, and regular backups of data.

Furthermore, companies must train their staff on the proper use of the system. It helps staff to know how to protect confidential information from being accessed or misused by unauthorized personnel.

Businesses may also need an experienced IT team to monitor and maintain the system to keep up with any changes or updates for optimal performance.

 

Final thoughts

Accounting automation has come a long way in the past few decades. It is likely to continue to advance in the future. As technology continues to evolve, more businesses will likely begin taking advantage of automation in their accounting processes. So, businesses should be aware of the potential challenges and prepare to stay competitive.

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Banking

How banks can help customers during the cost of living crisis

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 Lavanya Kaul Head of BFSI, UK & Ireland, LTI Mindtree

 

Surging energy and food prices are significantly driving up household expenditure, which means living standards in the UK will fall to 2.2% this year, according to the Office for Budget Responsibility. This is the biggest drop in any single financial year since the records began in 1956-57.

It’s a tough situation for many consumers who are still struggling with financial hardship following redundancies and pay freezes from the pandemic. According to TSB’s Money Confidence Barometer, 82% of people have experienced an increase in the day-to-day cost of living. This resulted in almost a quarter of them using their savings, while one in five changed their usual spending habits and behaviours.

As the financial situation worsens, consumers are increasingly relying on their banks for help and support. But, while banks can’t control inflation, energy or food prices, they can play a more supportive role by adapting their services to offer stronger customer service, better tools for financial management and be more flexible with loan repayments.

 

Strengthen customer service with intuitive AI solutions

Since the pandemic, consumers have changed the way they bank, using more mobile apps for primary banking rather than going into physical branches. This provided an opportunity for banks to accelerate their investment in digital services including automation and offer customers more support during the cost of living crisis.

Lavanya Kaul

Effective tools include AI-powered chatbots which respond intelligently to customer enquiries to quickly help troubleshoot problems and provide useful advice. But to be successful, you need to ensure you strike the right balance between an efficient and convenient process and creating a personalised experience. Customers need to feel like you understand and care about their problems and are here to help, rather than just fobbing them off with a monosyllabic bot. To avoid this, banks need to embrace intuitive AI solutions to ensure that empathy comes across in all automated interactions with customers. While doing that, messaging is key. In times of stress, we don’t function as well and financial struggles are a huge stressor. The clearer the message and the simpler the instructions, the better.

Financial education, when combined with technology solutions such as open banking, can offer more long-term solutions for people to navigate their finances. This can help put more information into the hands of the consumer to help them grasp their financial situation better. Some banks have cracked this with innovative solutions like HSBC’s Financial fitness score tool that can analyse your money habits and signpost you towards ways to improve your financial health. This may include joining one of the financial education webinars run by the bank or having a ‘financial health check’ with a member of staff.

 

Launch money management features & apps

Introducing money management features and apps to increase the visibility of a customer’s financial situation, empowers them with the information they need to make smarter choices.

TSB offers Spend & Save and Spend & Save Plus current accounts which include a savings pot that enables customers to put extra money aside when they can and an auto-balancer feature that automatically transfers money from the savings pot into their current account if their balance falls below a certain level. This allows them to start building up savings and protects them from unnecessary overdraft charges.

Personal financial management (PFM) apps also help customers get a better understanding of their finances. These connect with a customer’s bank account and enable them to keep a close eye on their spending habits and track upcoming bill payments. An example is Prism, a PFM app which allows customers to manage bill payments by sending them reminders about due dates. It also provides a summary of their income, account balance and monthly expenses at a glance, therefore consolidating all their financial information in one place and saving time on bill payments.

Lloyd’s Banking Group and HSBC launched a subscription management tool for all customers on mobile, allowing them to see and cancel recurring card payments for things like TV subscription services. HSBC says that during the first quarter of the year, it led to customers dumping around 200,000 subscriptions.

 

Introduce payment holidays

While improved customer service and financial management tools are important support tactics, they might not be enough for more vulnerable customers. For example, those who are about to default on mortgage payments or loans due to redundancy or periods of ill health need banks to do more, like offering payment holidays. Banks relaxed the rules for payment holidays during the pandemic, so they should consider doing it again to help more vulnerable customers through the crisis. Customers need to understand that they are not alone when experiencing financial difficulties and that help is available

 

Ride out the crisis together

As inflation reaches a 30-year high, customers are now more reliant than ever on banks for guidance and support. But to provide the right level of service, they need to move away from their traditional ways and behave more like technology companies by embracing automated solutions to create the right products and services for customers. Then layer on top of that the need for more personalised and empathetic customer interactions, as well as consider additional support for more vulnerable customers.

While we don’t know how long the cost of living crisis will last, what we do know is that the pressure on household finances is likely to get worse before it gets better. Therefore, banks need to step up, be the supportive partner and do whatever they can to help customers. After all, the only way we can ride out the crisis is by supporting each other and working together.

 

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