By Gary Lessels, General Manager at HotDocs, Powered by AbacusNext
If you’re on autopilot, leave it to the computers…
The finance sector is highly regulated, with good reason. Since the economic crash over ten years ago, financial organisations have faced increased scrutiny and are constantly under pressure to perform both efficiently and ethically.
While it is vital that we meet these stringent requirements, our financial workforce’s productivity has been crippled as they become increasingly burdened by administrative and office management tasks. A report from Cerulli Quantitative shows that financial advisors can spend up to 41% of their time on these processes. That’s an estimated 2 hours per day spent on tasks that aren’t generating new income for the business.
It’s not just the financial sector. A staggering 90% of employees face dealing with repetitive tasks that could be easily automated according to SnapLogic. The average employee spends a third of their working year (more than 600 hours) on admin alone. In an industry as closely regulated as specialist finance, staff can spend an inordinate number of hours compiling and reviewing binding documents throughout the working week, consuming critical time they could be spending on other things which need considerably more brain fuel.
So how do we combat this problem? Embracing technological advances is key. There are many increasingly sophisticated technologies available to support our financial workforce by streamlining repetitive manual processes. This leaves employees with more time and energy to focus on tasks that require the human touch, such as creativity, innovation and client support.
Regulatory technology, or RegTech, is technology used to ensure organisations manage regulatory processes correctly and efficiently. Using real-time information, RegTech uses cloud-computing technology to help organisations remain fully compliant with regulations. Functions automated by RegTech include employee surveillance; compliance data management, fraud prevention, and audit trail capabilities.
The meteoric rise of FinTech has led to an exponential increase in the amount of customer data received. As we became increasingly reliant upon this consumer data to drive our digital offerings, it was apparent that we required sophisticated regulatory measures and technologies to ensure both consumers and organisations were protected and secure.
According to a survey by Intertrust, an overwhelming majority (85%) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020 to combat ever increasing regulatory pressures as the impact of the financial crisis shows no sign of abating.
Automated document generation
Automated document generation is the use of sophisticated template technology to create error-free documentation. This increases operational efficiency in document creation, reduces risk, enhances compliance and saves resources. It ensures that information contained within business-critical documents is accurate.
Regulatory lawmakers are notoriously fickle. Any time a governing body meet; the regulations are subject to change, which directly impacts the compliance of related legal documentation. In these uncertain times, as the unknown impact of Brexit remains at the forefront of our minds, it’s becoming increasingly difficult for experts to keep on top of every change. Fortunately, automated document generation can help stop us from making mistakes.
Implementing document automation software gives financial professionals confidence that they are consistently compliant. The software allows for legislation to be updated in one location, which in turn appears on all new documents created.
The use of this technology has also been adopted by many organisations trading internationally, such as global banks, as it ensures regional variables such as date format and currency are adhered to automatically.
Document accuracy is absolutely integral to business performance. Using a template-based format, without fear of non-compliance, standardises work practices and makes the process faster. Implementation of document automation technology in the financial sector can drastically reduce the time spent drafting, reviewing and finalising contracts by up to 80%, allowing the experts to focus on the job in hand.
Robotic Process Automation
An increasing number of financial organisations are using Robotic Process Automation, or RPA to support back office processes and time-consuming manual tasks that previously required human input.
RPA is the use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks such as calculations and maintenance of records and transactions.
This is especially promising for the financial sector. Capgemini reported that by 2020, the financial services industry could see up to $512 billion in new global revenues thanks to the implementation of these technologies.
RPA can have a huge impact on operational efficiency. For example, financial institutions process a high volume of customer service requests. RPA can help organisations automate the manual, repetitive tasks that fill the daily operations of customer service reps including updating records and order statuses. This is incredibly efficient as all information is automatically synchronised between systems, and cuts down on time clients need to spend answering queries.
RPA also enables financial organisations to improve their communication channels. For example, customers can request balance inquiries using text messages. As these daily repetitive tasks become automated, customer service representatives can focus on solving more complex issues, and develop more meaningful relationships with customers.
These advances in technology, and many others, have the potential to support financial specialists, enhancing their ability to focus on their jobs and deliver their business objectives by freeing them from the burden of repetitive administrative tasks. As a sector we must embrace technology in order to evolve and push forward with innovation.
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HOW TO MANAGE YOUR CASH FLOW IN UNCERTAIN TIMES
While the world is constantly changing, probably at a faster pace now than ever before, businesses need to manage cash flow and costs to drive success in uncertain times, says Matthew Thorpe, partner at Haines Watts Essex.
Managing people and expenses
There are certain costs that you just can’t avoid as a business – to keep your operation running seamlessly, but scrutinise the detail and cut down on any non-essential expenses. Check things like your SaaS subscriptions and look out for costs that auto-renew and if you do cancel, remember to also cancel your direct debits too.
You might want to put a freeze on hiring new people, but ensure that other roles and responsibilities are clearly and efficiently assigned across your team. The Coronavirus Job Retention Scheme (CJRS) has been introduced by the Government to help UK employers access support to continue paying part of their employees’ salary to avoid redundancies. Affected employees are classed as “furloughed workers”.
Once furloughed, the employee cannot work or they will not qualify for the scheme. For businesses that perhaps need to go further, there may be some roles they don’t need any more, but businesses should work sensitively with people to manage this.
Cash is king
In uncertain times, owner managers will need to keep operations going to ensure financial stability. You should look to manage debt more efficiently by negotiating extended payment terms with creditors. You could also renegotiate loans for longer repayment terms to give yourself a lower monthly payment, helping the business to set some cash aside each month.
As a business owner, you need to create a cash flow projection and update this regularly if you are to improve things. You can do this using financial information to create a picture of how the business will look in the next 12 months. The forecast needs to show revenue sources and expenses, which will show the ups and downs of business income and can be used to make sure that enough finance is in place.
While banks and other finance providers recognise that the cashflow of a business may be disrupted by the impact of Covid-19, they are still going to want to see that you are viable and continue to trade in these uncertain times. Make sure your business is organised and don’t let disorganisation cause unnecessary issues. You can evidence this by having detailed forecasts; current order books and projections (as best as possible).
Having instantly accessible, accurate financial information allows you to plan effectively, spot issues before they become problems and manage your money in the most efficient and rewarding way.
Software is now incredibly user-friendly and accessible from anywhere. For a business owner embracing the technology, this means:
- Invoicing can be done instantly when a job is complete, emailed to the customer with an easy to use link to a payment platform.
- Comparison websites can automatically monitor and help maintain lowest cost for things such as light & heat, insurance etc.
- Technology can be used in place of face-to-face meetings. It can also enable them to adapt production lines to different demands.
All of these things and more, used properly, can make managing your business finances quicker, easier and often cheaper. You will also be able to bring clarity to where your business stands and prepare for the next steps.
HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK
By Alex Saric, smart procurement expert, Ivalua
UK businesses have never been more dependent on their suppliers to help them deliver goods and services to their customers. Be it retail, manufacturing or financial services, suppliers have a vital role to play when it comes to innovation and meeting customer expectations. However, as supply chains become increasingly global, businesses are potentially exposing themselves to more risk than ever before.
This is especially true in financial services. Whether it’s the impact of geopolitical events like Brexit or global tariff wars, supply shortages, security or the businesses impact on the environment, an organisation’s failure to identify and mitigate risk could see millions wiped off its share price, and its corporate reputation left in tatters. Risk can present itself anywhere and at any time, so financial services firms must be ready to address it. However, many simply don’t have the ability to evaluate suppliers for risk factors, leaving them wide open to business operations being hindered, or being slapped with financial penalties.
More suppliers, increasing risk
One reason why financial services firms aren’t able to evaluate suppliers is the breadth and scale of today’s supply chains. For example, French oil company Total said in in a recent human rights briefing paper that they work with over 150,000 direct suppliers worldwide. This is just one example of how large and varied the roster of partners has become. Research from Ivalua has found that financial services businesses on average are working with around 3,600 suppliers annually, which is evenly split between UK-based and international partners. That number is expected to rise, with 60% expecting the number of suppliers they work with to rise.
The expanding nature of suppliers is only going to expose financial services firms to more potential risk than ever before, yet 78% say they face challenges gaining complete visibility into suppliers and their activities.
A lack of supplier visibility leaves businesses unable to identify and mitigate against supply chain risk. In fact, almost three-quarters (73%) of financial services firms have experienced some type of risk during the last 12 months. These include; supplier failure (43%), environmental impact, such as pollution or waste (35%) and supply shortages (45%). Supply shortages can be among the most damaging to a business, as seen by both the KFC chicken shortage which closed stores, and the summer 2018 CO2 shortage which caused companies such as Heineken and Coca-Cola to pause production, impacting supply across Europe during the World Cup.
Businesses unprepared for the worst
One way financial services firms can better prepare for risk is to ensure they know what to plan for to reduce the impact. However, whilst some say they have a contingency plan in place to deal with risk, many of them are unprepared. Financial services firms admitted to not having comprehensive and deployed contingency plans in place to prepare the supply chain for risk such as; natural disasters (68%), supply shortages (67%), geopolitical changes (65%), environmental impact (63%), supplier failure (62%) and modern slavery (50%).
In order to effectively prepare for these types of risks, it’s vital that financial services businesses fully understand their suppliers, their business environment, global variations in regulations, geopolitics, and a host of other factors. But for many, there are multiple challenges when it comes to gaining this understanding. A prevailing factor is an inability to gain visibility into all suppliers and activity because supplier management data is stored in multiple locations and formats, making insights difficult to access. This leaves teams unable to review supplier activity and assess compliance.
Making supplier management smarter
It’s imperative that financial services businesses are able to respond or prepare for supply chain risk. Clearly, much more needs to be done to ensure they have complete visibility of suppliers, especially in an era where regulators can levy heavy fines for GDPR breaches and scandals spread in minutes over social media. These types of risks can be reduced in the future if procurement teams have a 360-degree view of suppliers which will help with contingency planning and risk management.
For example, in the instance of supply shortages, plans could be put in place that identify alternative suppliers to ensure any shortages do not impact end users. This type of supplier collaboration is paramount when it comes to managing and mitigating against supplier shortages. When it comes to regulations, financial services firms can’t allow a lack of visibility to limit their ability to ensure all suppliers are compliant.
To do this, teams must take a smarter approach to procurement that gives complete visibility into suppliers throughout the supply chain. This will allow financial services firms to identify and plan for risk, reducing the potential damage, and ensuring they are working with and awarding business to low-risk suppliers. Supply chain risk is rapidly becoming an overarching concern for financial services firms, but by providing the ability to assess suppliers, they will have all the insights they need to mitigate the impact on business operations.
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