How to create value by simplifying financial processes

Nearly all financial services organisations suffer from the complexity of disparate systems, multiple management processes, and a sheer number of spreadsheets across the organisation, leading to the over-complexity of financial environments. This coupled with differing policies, business rules and regulations lead to an inability to access accurate information in a timely manner, causing process inefficiencies across the business.

Creating value through process simplification, while meeting client demands and adhering to industry regulations is a challenge, but those that take a step forward will have a significant competitive advantage while creating value along the journey.

What is process simplification and standardisation?

Complexity has a cost, systems, people, and the lost time spent on backward-facing activities, rather than on money-making client work, it also hinders communication from the bottom up.

Simplifying and standardising processes with stakeholders, educating people to fully leverage systems, introducing new technologies where appropriate, and optimising existing systems through integration and automation. Promptly delivers accurate and reliable information, freeing financial professionals to focus time on data analysis rather than reconciliation, compiling, and manipulating data, leading to value creation across the organisation.

The path to improvement

The path to improving financial processes almost always comes from a range of pressures. For some it could be working smarter with large datasets by visualising and manipulating it through tools such as PowerBi and Tableau, for others it could be connecting systems that have been acquired through a business acquisition. Whatever your reason for simplifying processes, it requires a thoughtful approach. Consider these steps:

• Create a clear business case that connects to your value system to gain key stakeholder buy-in upfront, articulating the need for change
• Once the desired outcome has been determined, run a gap analysis between your current state and future state, answering the following questions:
  • Does the financial process require inputs that come from another or multiple departments?
  • Is regulatory compliance using up too many resources?
  • Have you identified process bottlenecks or weaknesses in your systems?
  • Do your processes often require manual intervention or workarounds?
  • Can the right people access financial metrics?

Removing barriers by integrating applications and eliminating redundancies

Financial markets are becoming extremely complex, driven by new digital assets and the growing adoption of private markets, these complexities are becoming a stimulus for operational inefficiencies, which lead to unnecessary financial burdens on firms. Simplifying and modernising internal processes can help keep these costs down while creating competitive advantages. However, in the future simplification will be more a necessity than an advantage.

Financial organisations typically have lots of business applications, developed at the time to meet a specific requirement. This infrastructure is often the result of mergers and acquisitions that have been completed over decades. These fragmented systems seriously undermine operating efficiency, increasing complexity and bleeding time. Financial orgs have traditionally lived with these complexities as they have structured themselves in a way to deal with the fragmentation, and technical capabilities have been limited.

In today’s age with the requirement to introduce new products and services to market on-the-fly, the challenge is for firms to do more with less across the business while navigating market volatility. To keep up with these swift market movements requires new environments that are built to enhance efficiencies, which can only be achieved through process simplification, standardisation, and system consolidation.

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Simplification can remove barriers by streamlining processes, integrating applications, eliminating redundancies, breaking down silos and enhancing productivity. The business benefits are:

• Lower operating costs
• A decrease in errors
• Improvement in client service

Simplifying processes makes systems and people more fungible. Giving firms the ability to expand their horizons by reallocating resources to meet client needs and drive revenue growth, could be the movement and migration from 20 order management systems into one system across the entire business for example.

To conclude, financial organisations must expand by reimagining how people, processes, and systems work together through simplification, standardisation, automation, and consolidation, creating value across the business.

Nexus Technology helps financial services organisations to redesign processes to optimise their business operations. Working with Nexus combines strategy, implementation, optimisation, and training, which leads to higher productivity, increases in revenue, lower costs, and identifies new business opportunities.