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While this compliance-based sword of Damocles is undoubtedly a powerful motivating force, it’s not necessarily one that encourages firms to see OR as more than a nuisance or threat – a chore to be carried out economically and begrudgingly for fear of substantial fines.

To put it another way: when acting purely on the basis of compliance, OR can feel motivated more by ‘stick’ than ‘carrot’.

Compare this to the project of achieving operational efficiency: a far more attractive proposition which animates many efforts to achieve cloud and digital transformation. We regularly work with clients who have spent seven- and eight-figure sums to proactively improve their efficiency, despite the challenges of outlay, implementation, and governance that such schemes invariably face.

At a glance, resilience and efficiency might seem like opposing poles in the quest for operational improvements, as grim-faced OR regulators demand audits, inquiries, and costly remediation plans – in stark contrast to the sunlit uplands we tend to associate with efficient practices capable of enabling business growth. In reality, however, OR and efficiency often go hand-in-hand – good resilience practices can improve efficiency, while moves towards greater efficiency can equally contribute to OR goals.

The dual benefits of an automated CMDB

The role played by a robust CMDB is a prime example of how resilience and efficiency are two sides of the same coin. CMDBs are databases that provide visibility over the different parts of your business processes; business applications and infrastructure, and the connections between them – including the various people, facilities, and technologies involved in each business process, not to mention the underlying cloud and legacy infrastructure underpinning it all.

Obviously, these tools – especially when automated to provide accurate, up-to-date information – can therefore play a big role in enhancing an organisation’s resilience: this level of visibility allows you to work out how a disruption to one part of the organisation might impact another – enhancing your ability to prevent, adapt to, and recover from operational disruptions.

CMDBs aren’t the be-all and end-all for OR, of course – like any tool, they require strong processes and governance – but it’s easy to see how well they fit into the landscape of resilience.

Crucially, however, CMDBs also have implications for the more obviously rewarding project of improved efficiency.

Gaining comprehensive visibility over your organisation’s infrastructure doesn’t just highlight vulnerabilities – it’s also an equally useful way to make better business decisions, spot opportunities for streamlining processes, and identify areas that would benefit from automation.

As such, while a robust CMDB might be an example of a tool acquired for the potentially unexciting reasons of compliance and business continuity, it also acts as a powerful springboard for new levels of efficiency and (by extension) growth.

Reporting, auditing, and ticketing

The subject of automation brings us to another example of the overlaps between OR practices and efficiency goals.

In the context of enterprise service management (ESM) platforms like ServiceNow, nobody needs to be persuaded that automation and artificial intelligence have huge utility – whether by eliminating tickets and allowing human workers to focus on more important issues or by quickly deploying applications without fear of human error. Obviously, these examples denote significant cost savings – but the same embrace of automation also has the potential to improve resilience.

We’ve leveraged automation in this context by, for example, using virtual agents to guide staff through potentially tricky compliance tasks, providing real-time reporting in ways that improve governance, and drive compliance audits through ServiceNow – helping organisations to manage the expectations of regulators. In other words, automation can sharpen up reporting and auditing to keep those all-important compliance standards up to scratch, while simultaneously enacting a host of cost-reducing measures.

The point, here, is that efficiency and resilience shouldn’t be seen as the ‘carrot and stick’ of operational improvement – they can be deeply entwined and mutually beneficial.

As such, achieving resilience shouldn’t be perceived as a banal exercise in regulatory box-ticking, but as an opportunity to improve processes, systems, and technology. Moves like automation are a case in point, allowing organisations to reduce costs, stimulate growth, and remain robust and compliant in a single gesture.

About the author: Adrian Overall is CEO of CloudStratex.

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The pandemic has also pushed the sector further into the national spotlight. Financial services providers are under pressure to support businesses and individuals in distress, while facing increased scrutiny over customer experience – particularly when it comes to vulnerable customers. Finance Monthly hears from Craig Naylor-Smith, managing director of Parseq, on  how firms can keep up with these demands and overcome the new obstacles 2021 will bring.

In this climate, firms must continue to invest in their operations if they are to remain competitive, protect their reputation and meet the constantly evolving demands of customers. By transforming inefficient processes, firms can develop more productive operations and free-up funds to help drive new investment in the year ahead. Here, the support of an expert partner can be key.

Transformation plans

It is encouraging to see that financial services executives already have transformation firmly on their agendas. At Parseq, we recently surveyed more than 50 C-suite executives at some of the UK’s largest financial services firms for our inaugural Big Business Efficiency Report to understand their plans for the next 12 months when it comes to transformation and efficiency.

Four in five executives (84%) plan to transform their business operations over the coming year, and every executive we spoke to is planning to make their business more efficient.

When it comes to transformation, executives’ focus areas are diverse. In the front office, marketing (44%), sales (37%) and customer experience (19%) are priorities. In the back office, finance and administration (35%), IT (30%), compliance (26%) and HR (26%) top the list.

The use of AI and machine learning (41%), digital channels for internal and external communications (35%) and new workflow management software (33%) are the most popular steps executives will take to help increase business efficiency in 2021.

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When asked how they would use the capital unlocked through efficiency gains in the next twelve months, more than half of respondents said they will invest in new technology (57%), while almost two fifths said they would improve customer experience (37%) and expand into new markets (37%).

Overcoming obstacles

These findings highlight the broad range of efficiency and transformation strategies financial services executives are formulating. However, executives also highlighted several barriers when it comes to putting efficiency measures into action.

Our respondents cited cost (37%), complexity (35%), a lack of time (29%), a lack of knowledge (29%) and a reliance on legacy systems (29%) as their biggest hurdles.

And, while 71% of executives who said they were planning to use outsourcers over the next 12 months were more likely to do so after the UK’s first lockdown in March, a fifth (20%) said a lack of awareness of available third-party support was a factor currently holding them back.

From our 40 years of experience at Parseq, we know that outsourcing to a third-party can achieve permanent efficiency savings of at least 30%. However, while outsourcing partnerships can return impressive cost savings and help executives directly tackle issues such as complexity and time, its benefits can extend far beyond this. Through their expertise and experience, outsourcing partners can also play a key role in helping firms deliver long-term transformation in their operations.

Looking ahead, financial services firms that successfully enhance their efficiency and enact transformation will be well placed to overcome any obstacles that may arise this year. Through transformation, and by utilising third-party support, businesses will be able to unlock the capital that will be key to helping them thrive in a challenging and competitive environment.

Outsourcing Finance Services: Everything You Need to Know 

The popularity of financial outsourcing is growing every day, as it enables medium-sized businesses and large companies to improve their financial functions cost-effectively. In this article, we will cover the following points:

  1. What is Outsourcing & Accounting Outsourcing?
  2. Risks Related to Outsourcing Finance Operations
  3. Reasons Why Organisations Should Outsource Finance and Accounting
  4. Outsourcing Finance: Find a Reliable Vendor 

What is Outsourcing & Accounting Outsourcing?

First, you need to know that outsourcing is a company's refusal to independently perform a number of non-critical business functions or parts of business processes and transfer them to a third-party contractor who professionally specialises in the provision of such finance and accounting services.

Consequently, financial outsourcing is the transfer of the functions of accounting and tax accounting and reporting to specialised organisations.

Company's Operations to Outsource

Of course, financial and accounting outsourcing is not all. Companies can outsource the following functions:

For example, if you are looking for software development outsourcing, it would be a good idea to look into the web development services of a company that develops custom software from a distance.

Finance Services for Outsourcing

If you want to outsource crypto or financial tasks, this does not mean at all that you need to give the intermediary all the available financial information.

Outsourcing can be used for the following assignments:

  1. Bookkeeping and Back-Office Support 
  2. Controller Services
  3. Financial Planning and Analysis (FP&A) 

3 Types of Outsourcing

Now you already roughly understand what functions in the company you can outsource. Now is the time to choose the type of outsourcing.

There are three different types of outsourcing:

  1. Local Outsourcing
  2. Nearshore Outsourcing
  3. Offshore Outsourcing

So you will need to deal with each type separately and decide which one suits best.

Risks Related to Outsourcing Finance Operations

Any modern innovation, like accounting outsourcing or day trading crypto, has its own risks. They should not scare and stop you, you just need to take them into account and think over in advance what you will do in case of an unfortunate situation.

Possible Hidden Costs

Due to the fact that you, shall we say, start working with new people, there is a possibility of misunderstanding, which can lead to the fact that in one task there will be more details, the implementation of which you did not initially take into account, and this will increase your expenses.

Therefore, try to immediately discuss everything in detail and draw up a specific plan of tasks.

Less Control

When you delegate tasks to someone who is not on your team, it will be difficult for you to control the process. You will no longer be able to ask daily how the process is going.

Therefore, it is very important to initially establish a high level of trust so that you do not constantly feel that the person will do something wrong.

Distance, no Local Presence

We have already talked about this above. When you transfer some functions to outsourcers, you will be ready for the fact that you will receive answers to questions, let's say, with a delay.

To make it easier to communicate, you can set a specific schedule so that the outsourcer knows exactly when you will contact him.

Reasons Why Organisations Should Outsource Finance and Accounting

Of course, the reasons why it is very profitable for companies to outsource certain functions clearly outweigh the above risks. Let's take a closer look at all the benefits.

1. Cost-efficiency 

According to statistics, the use of outsourcing for a number of functions of company employees reduces costs by 30-45%. This is because there are employees who receive a lot, but for some reason their performance may decrease, which harms the result.

2. Focus on Strategic Tasks 

When you outsource a percentage of your work, it automatically creates more time and energy that can be spent on important tasks for the company. Everything is simple here - the less your employees are employed, the better they will perform important work.

3. Access to Specialised Talents

Outsourcing finance and accounting, since it is not tied to a specific territory, gives you access to all the people in the world who are looking for outsourcing accounting work. Thus, you have increased opportunities to find a talented and experienced person in their field.

4. Hiring Costs Elimination

When you hire a new employee, very often they need to be taught, trained, sent to some courses, and so on. With outsourcing finance, all these costs disappear, since you hire a professional in your business who just needs to be given a task.

5. Advanced Technologies and Systems

This is one of the biggest benefits, as outsourcing companies usually use cutting edge technologies that help increase work speed and avoid mistakes as much as possible.

6. Enhanced Business Operations & Accuracy

Again, outsourcing is convenient in terms of the quality of work. Your regular employees, who do the same tasks every day, do everything automatically and do not try to change or improve something. By outsourcing finance tasks, you can get not only fresh solutions, but also, possibly, change something in your company.

Outsourcing Finance: Find a Reliable Vendor 

We have already talked about what benefits a properly chosen outsourcing company can bring to you. The main thing remains - to choose this company.

Therefore, now we will talk about how to choose the right outsourcing company.

1. Search for Proven, Streamlined Processes 

Experienced outsourcers always have an established process and structure. You need to look for those who will not only promise a good result, but also clearly show how they will achieve this result.

Also, keep in mind that the team you hire must ensure risk control and data security.

2. Check Team's Experience

It is clear that you are not going to hire a person from the street, but it will not be superfluous to check the experience of the team, what projects they worked on, and ask for recommendations, and so on.

3. Evaluate Methods and Metrics for Success Measuring

Ideally, your prospective provider should have methods that will provide assessment and improvement of the company's financial condition, as well as show errors.

In Conclusion: Is Outsourcing Financial Services Right For Your Company?

Finance and accounting outsourcing services will help you not only decrease the tasks of your employees, but also reduce costs, improve results, improve some activities in the company, and so on.

The main thing remains to find an experienced provider who will meet all the necessary conditions.

A high-quality and well-thought-out process will bring great benefits to your company!

Mark White, Financial Performance Management Specialist at MHR Analytics, outlines the steps financial specialists must take to keep projects from falling short.

It may come as a surprise, but research shows technology accounts for less than 1% of financial transformation failures.

Unfortunately, technology is often used as the scapegoat when the promised benefits fail to accrue from a major project. The reality is that most transformations fall short because neither an organisation’s leadership, nor its employees have developed the necessary growth mindset.

It’s here that the role of the CFO is critical in financial transformation. Firstly, to sell the transformation vision to the C-level executives and secondly, to empower and encourage the finance team and make them central to the journey. When the CFO knows the team is ready for change and understands the benefits, he or she has greater confidence in taking on the risk of transformation. Because employees let go of the past, they change with less resistance and become productive in the new situation.

At the outset it is important for the CFO to have a clear vision of what the organisation is trying to achieve and deliver. This is where the use of external expertise can make a significant contribution, helping understand the ‘art of the possible’.

Once this is understood, the organisation should set a realistic scope and matching expectations, taking small, manageable steps rather than trying to “boil the ocean”. Remember, transformation is an ongoing process and it should have no time limits.

At the outset it is important for the CFO to have a clear vision of what the organisation is trying to achieve and deliver.

As well as having the right mindset, devoting enough time to focus on transformation through strategising, training and delivering can also be a major cause of project failure. It is important to prioritise the use of internal expertise to deliver transformation, encouraging input and buy-in. But when the required know-how is absent internally it will be necessary to seek external help.

We can summarise the journey to financial transformation in a three-step process.

Step 1 – set a vision

The CFO and the finance team should set the vision. Finance teams should consider where they want to be on the scale that goes from bean-counters to strategists. It’s worth canvassing the organisation for its perceptions as a starting point.

Then teams need to get into the nitty-gritty of each process, identifying where there are inefficiencies, potential barriers and what their impact will be. Some limitations may be around systems and technologies or available resources and skills. Identifying the future impact on resource and skill-sets may be difficult at this early stage, but it is worth the effort.

From here the team should set out a high-level plan for transformation, mapping key steps and quick wins, quantifying benefits, and calculating an outline cost. External expertise may well be necessary to achieve this. The output from these efforts is a strategic finance transformation plan that the CFO should sell to the CEO and the board.

Step 2 - select a technology platform and partner

Pull together detailed requirements, platform restrictions and a deployment methodology. This will result in a selection process to identify the technology platform and partner that best suits your needs.

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Step 3 - start with quick wins and then move on

The transformation team should now look for quick wins because it is critical to build confidence and momentum in the early stages. Starting with process improvements to free key staff to deliver further transformation. Once the foundations are in place, the finance team can start to effect change in the organisation, improving perceptions of its role.

Conclusion

Transformation, like time, never stops, but it does not have to start with a Big Bang event that causes shockwaves in an organisation. The transformation journey needs to begin with setting a vision for the CFO and finance team. Once this is in place, an organisation should select a technology platform and partner for delivery. Finally, it must deliver transformation as an ongoing initiative, using external expertise for guidance when required. This is the three-step approach that makes financial transformation far more likely to deliver success for the finance team and the organisation it serves. It should no longer be necessary to blame the technology.

Is it time to consider how recent changes to our working habits, previously thought of as radical, may have set the example for how we will work in future? As the supposed importance of 9-5 hours is eroded, and with World Productivity Day just around the corner on 20 June, it seems like now is the time to consider whether greater flexibility with our working hours will lead to a more productive workforce - even in the ‘round-the-clock’ world of financial services. Daniel Bailey, Vice President, EMEA at Zendesk describes how this can be made possible.

Embracing flexi-time all the time 

With teams logging on and off at times that better suit their lives, how can financial service providers - whose industry operates across time zones and is based around set working days - be expected to become more productive?

When Microsoft trialled the four-day work week (with no reduction in pay) in Japan last year, productivity increased 40%. The reduced number of working days led employees to find ways to make meetings shorter and more effective, and subsequently, they felt happier and more motivated in their roles. Simply put, the change drove efficiency. Four-day working weeks aren’t going to become commonplace for everyone. Instead, employers can focus on making flexible hours the norm. This could mean allocating certain ‘core’ hours of work for your team, and allowing them to flex either side of this to accomodate the needs and demands of their personal lives. Offering employees this kind of flexibility can actually enhance efficiency and ensure your employees feel motivated.

When Microsoft trialled the four-day work week (with no reduction in pay) in Japan last year, productivity increased 40%.

Supporting team efficiency

If your staff are working flexibly, internal collaboration tools are one piece of the puzzle for making sure your teams are delegating and sharing work, as well as getting timely updates on progress across their disparate work hours. Financial services teams should implement intelligent tools. By doing so, clients receive advice more quickly, and without the hassle of being passed around departments. Requests received out-of-hours can be escalated if they are urgent, routed to staff who have chosen to work later or can flex their time back later on. As a result, even with fewer staff simultaneously online, communication doesn’t fall through the cracks.

Furthermore, these tools can pull data from inbound enquiries that offer insights into the work your employees spend most of their time on. Not only does this help to plan your teams’ time, but repetitive enquiries can be automated to provide round the clock, easily accessible support. A robust help desk can be built that helps your clients to find answers for themselves, providing a simpler experience for them and freeing up your employees time.

The human touch

In the financial services industry, clients want to know that their money is in safe hands. That requires personal connection, trusted account leads and employees who can demonstrate that they care about their customers. But moving to a more fluid workday doesn’t mean that this element of the client relationship is in jeopardy - it means that it must be central to what gets done in working hours.

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Considering the efficiencies mentioned above, enquiries now reach the right teams faster, and the repetitive requests are handled automatically. What remains are the most pressing concerns and queries of your customers, one where there is no alternative to human interaction to offer expertise and maintain trust.

A significant part of that trust is built on feeling valued and understood as a customer. A business equipped with the right tools can immediately see a history of the customer who has made contact, their previous issues and account information, to facilitate a genuinely helpful and personalised interaction. If multiple teams are involved in the customer’s account, it is quicker and simpler to share data from their interactions and teams, leading to timely resolutions and greater satisfaction - even in the flexible working day.

Outside of customer contact, the work time given back to your employees can be used for the creative and strategic work that boosts productivity and helps to grow the business, offering new services to your clients.

The flexible working week may sound like a pipe dream. But so did remote working at one point - yet in these unusual times, we’ve seen how resilient and capable employees can be, adapting to keep businesses running. When offered more control of their time, to focus on themselves and their personal and social commitments, and the promise of greater productivity and more rewarding work when they are in the office, working 9-5 could be the next relic from our lives before - dare we say it - the new normal.

 Though it’s exciting to think about the additional efficiencies your business will gain in absorbing or being absorbed by another company – such as increased capital, wider market reach, economies of scale in production and manufacturing, increased technological capacity, and more – it is important to get to know the company you are merging with first. You want to make sure that it’s a safe and sound transaction, and mutually advantageous to both parties. You wouldn’t want to get married to a person with skeletons in the closet, after all.

The following two tenets are probably the most important things to consider when talks of a merger are in the works.

1. Ask yourself the question: are your businesses a good fit? Why?

How would partnering with each other improve your brand equity, as well as your bottom line? Here, you get to kill two birds with one stone. The first job is to assess how reputable the partner company is deemed by the general public. Would partnering with them align with your company’s values and ethos? Will you still be regarded by the market as the honourable enterprise you have always been seen as, or maybe even improve how you are perceived? Do the brands banding together create the image you have always wanted to be seen by your customers?

Also, will the combination of your businesses increase efficiency overall? Will it contribute to an improvement of your business? Will it be a boost to the company’s overall profitability? Answering these questions in a positive way are the basic and most important concerns you need to cover from the beginning.

2. Take into account all the objective financial considerations.

Of course, there are a lot of figures that need to be studied when getting into a merger. Basically, you have to make sure that a company’s assets, liabilities, and equity are all that they declare them to be. Make sure that assets standings are accurate, are not over declared, major capital investments such as equipment or real estate values are declared as well as corresponding depreciation and amortization for these, not to mention other deeds, title policies, and permits.

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Liabilities are also very important to consider. Make sure you have a detailed schedule of all short and long term debt, a full list of creditors and suppliers, corresponding terms and interest rates, and most importantly, the company’s current standing in terms of ability to pay these creditors.

These details can be pretty tedious; so it is wise to hire the appropriate accountants, lawyers, and due diligence companies such as Diligence International Group. It may be an expense for you up front, but it should be seen as an investment – it is better to have all important details ironed out in the beginning before getting into any binding contracts.

These two are probably the two basic pillars in assessing and properly evaluating your merger. The rest may fall under these two categories, such as company culture and corresponding effects on your human resource team, their corporate social responsibility and environmental sustainability practices, patents and other intellectual property concerns, among others.

The shared service approach provides a centre of excellence within large businesses, but according to Andrew Hayden, Senior Product Marketing Manager at Winshuttle, the challenge finance organisations often face is how to successfully transition separate business units’ processes and data into one single set of systems, and it can be an onerous process which, unless handled correctly, could result in less efficiency, not more.

The shared services model can help corporate finance teams meet their efficiency targets but avoiding the inefficiency trap caused by moving and transforming financial data into one place is essential if the business is going to meet strict efficiency targets.

Beyond ‘lift and shift’

When an organisation decides to move to a centralised shared service approach, the first step is usually to pull existing financial processes out of the hands of disparate accounting functions and business subsidiaries and pass them all into the new central function. Adopting this new structure typically means one team now handles all financial transactions, but they are still using a variety of systems – from spreadsheets and homegrown software to individual accounting platforms.

Implementing shared services requires a high degree of change within the business, and so it makes sense to maximise the benefits of doing so. This can only really be achieved when the actual financial processes themselves are streamlined to one central financial platform, quite commonly SAP.

A significant part of this system consolidation is the movement of data from A to B. Moving huge volumes of data manually is slow and time-consuming, and one approach that some shared service centres are adopting to significantly speed up operations is robotic process automation (RPA).

RPA in action

Here, we look at how SAP-specific RPA software solutions helped organisations including Vodafone, Anglo-American, and Novacon successfully streamline data in their shared financial services environments.

Vodafone decreases transaction processing time

At Vodafone, the shared financial services centre now handles the bulk of the organisation’s financial management, processes and transactions including fixed assets, Purchase to Pay, Record to Report and General Ledger.

Handling considerable volumes of assets within one SAP database proved challenging in this dynamic and frequently changing environment. In one area of the business, Vodafone had nine million assets and 100 thousand postings per month, which would typically take six months to process.

The task of doing so included using five different SAP screens and two different transactions, so a 100-line item record would take up to 60 minutes to process manually. To drive shared services efficiency, Vodafone used an SAP-specific RPA solution. It automatically posts data to SAP via Vodafone Excel workbooks, eliminating data entry through the SAP GUI and reducing the processing time to 15 minutes.

“The system works very well for us,” says Peter Barta, Asset and Project Accounting Team Leader, Vodafone, adding “our complicated processes are handled in fewer steps, which reduces time spent on complex postings and allows us to avoid any internal IT debt.”

Anglo-American increase efficiency savings by 80%

Anglo-American needed to implement a global shared services project to optimise business processes through common procedures. This required thousands of entries that needed to be manually processed on a daily, weekly and monthly basis. This repetitive and time-consuming task needed an effective solution without increasing resource capacity.

By choosing an SAP-specific RPA solution, Anglo-American was able to overcome these challenges without needing to employ specialists to transfer volumes of data. Procedures that would normally take a week now take only a day to process, increasing efficiency savings by 80%.

Novacon prevents data entry errors before they happen

Novacon, a lean management data company, faced challenges with data and process accuracy when working with a large shared service centre. Using an SAP-specific RPA solution it validated data entry against all business and SAP rules, preventing errors before they happen with a rate of 99+% accuracy in SAP. This also enabled a shorter development time of two months and at a lower cost compared to generic RPA technology.

Without doubt, shared services centres offer significant potential for finance to become more efficient, but it must be approached correctly, especially when it comes to the transference of data. Otherwise the organisation could find itself stuck in the inefficiency trap.

 

The emergence of AI has had a positive impact on the financial industry and has enhanced productivity, in particular in the accounting and banking areas. Therefore I anticipate that machine learning will definitely be a significant area of investment in the near future for this sector.   However, as with any change of this magnitude, the benefits offered by the implementation of AI in the financial sector are met with a number of challenges – most notably businesses ensuring they are equipped with the right technology, staff and skills to embrace AI and automation.

Automation is now used to perform or enhance many administrative tasks, and Artificial Intelligence is already more a part of daily life than you might realise. Robotics, while commonplace in manufacturing, are beginning to show impact in other sectors. One of the key drivers behind the adoption of AI software in the financial sector is the time-saving benefits it offers users. Gone will be the days of long hours spent working on spreadsheets, processing data, or handling customer enquiries. Those tasks will be streamlined by machines, allowing workers to focus more time on complex tasks which require human touch. As well as working with advancing technologies, junior employees will be involved in more planning, reporting and analytical jobs, and as such their required skill set will change.

Gone will be the days of long hours spent working on spreadsheets, processing data, or handling customer enquiries.

Through machine learning, artificial intelligence can painlessly consume and process large amounts of data at an accelerated level. Its vast speed brings efficiency and productivity to the financial sector, and as it continues to develop and become even more efficient, it can identify more patterns than ever before, providing scope for customised offerings to customers. However, this being said, adoption of AI in the financial sector imposes many challenges to the industry. The use of AI’s ability to consume large amounts of consumer data raises questions about how this information is stored and processed and to what end. Organisations that encourage, and even mandate the uptake of these types of technologies must tread carefully. Individuals are already highly attuned to the sensitivity of their personal information and will require robust guarantees about the security of any further information they are willing to give up.

One limitation of machine learning in this context is that it primarily relies on the basis of historical data sets and as a result, can fall into the trap of becoming repetitive, as well as potentially giving way to conscious or unconscious bias. For instance, how fair can a financial system really be without human involvement? In a world where new technologies are quickly improving or even replacing existing processes, there is one area that cannot be automated, and that’s building strong relationships with clients. The human element is needed in these instances to perform certain job functions that AI is incapable of replicating. Individuals have the ability to be aware of their own emotions and those of others, but also their capability of showing empathy in the way they handle interpersonal relationships, which is known as emotional intelligence.

It’s crucial for businesses, in the fast pace of today’s world, to continue to develop and think about where their use of data can get them tomorrow, as well as where it’s got them today. Organisations must not become complacent, and instead continue to reflect on their processes, challenge routine and be future-facing in their approach to machine learning.

One limitation of machine learning in this context is that it primarily relies on the basis of historical data sets and as a result, can fall into the trap of becoming repetitive, as well as potentially giving way to conscious or unconscious bias.

Over the last two decades, technology has advanced at such a speed that many roles in the financial sector have either disappeared or wholly changed due to the implementation of AI technology. One of the many challenges facing the finance industry is the impact that AI is having on the job roles within sector. Artificial intelligence and automation can take on many of the tasks a transaction led accountant or data administrator would typically undertake, with little or no human involvement. The process is almost seamless, error-free and time efficient.

The challenge of economic survival of the financial sector is to not only accept these changes, but to capitalise on them. With any significant change in the market, there’s always a fear that it will eliminate jobs from the workforce. AI tools may well remove a number of job tasks carried out by accountants and data administrators, but rather than eradicating jobs and losing talented members of staff, employers will need to ensure that their HR directors are equipped to spot the right skilled professionals who are well versed with the latest AI technology. The HR function will also need to quell fears of job losses amongst employees and instead empower their staff to adapt and develop new skills to work alongside new technologies.

At this juncture, skilled employees are key – and we anticipate a change in the skills that businesses across the financial sector will be demanding from their employees and prospective hires. For years, Michael Page clients in this sector have been seeking candidates with financing and analysis skills; those that have a strong understanding of financial planning and reporting; people who are adept at using Excel and other such software. Our recently launched Skills Checker tool has taken the most in-demand skills for roles across the financial industry to highlight what employers are looking for today. But as we continue to see AI and automation adoption increase in the sector, we expect to see a rise in employers expanding the skill sets they require from new employees with coding and AI experience becoming ever more valuable.

One of the many challenges facing the finance industry is the impact that AI is having on the job roles within sector.

To the same end, the advent of these new technologies presents the opportunity for businesses to enhance their current workforce by equipping employees with the skills to work alongside AI and automation. A challenge in itself, such training should not be brushed off as a ‘nice to have’; it is vital for the growth, and even the survival, of a business. Employees are the lifeblood of any business, as the landscape of the financial sector changes, businesses must ensure that their workforce is keeping pace with the industry.

Before incorporating AI software into their businesses, organisations will need to think strategically about what their key objectives are and what they hope to achieve from using the technology. This is the only way they can truly expect to see any long-term benefits, through a strategic and considered approach – not simply thinking of AI as a ‘nice add-on’. It’s also important for organisations to have realistic expectations.

Businesses should start by looking at key areas where they can make an impact by using this technology on more routine tasks and go from there. This will help to build their confidence and understanding of the software over time, rather than trying to implement it all at once. Strategic thinking and patience are key here.

Although robots and AI will inevitably take a lot of the more data-driven job functions, there will be a change in how humans and machines interoperate for the highest level of efficiency and playing to each other’s strengths. The increased use of AI in the financial sector is going to spur on new innovation, and an entirely new landscape of jobs are going to emerge. Although there is always a lag between the adoption of new jobs and loss of current jobs, up-skilling and re-skilling are going to be the key to success in the future of the financial job market.

Website: https://www.michaelpage.co.uk/

Louise Green is the Chief Marketing Officer at Bureau van Dijk, a Moody's Analytics company. It is committed to empowering customers to make better, faster decisions, by providing the most reliable private company information in the market. Below, Louise tells us about Bureau van Dijk’s Corporate and Financial Solutions and the importance of comparability and efficiency when it comes to data and company information.

 

Tell us about the key corporate and financial solutions that Bureau van Dijk offers

We aim to make our customers more successful by providing company information solutions that help improve efficiency, grow revenue and mitigate risk.

How much do you know about who you are doing business with?

Whether it’s the financial strength and longevity of your suppliers, your clients’ ability to pay, complying with regulations, protecting your reputation or understanding new and existing markets, more certainty is always welcome.

We capture a wide variety of data, then we treat, append and standardise it to make it richer, more powerful and easier to interrogate. In fact, we capture and treat data from more than 160 separate providers, and hundreds of our own sources, to create Orbis, the world’s most powerful comparable data resource on private companies.

Orbis has information on around 300 million companies in all countries. It’s the resource for company data.

The company reports are detailed and comparable, and comprise:

Our customers, including financial institutions, corporates, governments and academia, use our products for a variety of purposes.

 

Compliance and reputation management

With comprehensive global coverage, the richest source of corporate structures and beneficial ownership data available, plus information on PEPs and Sanctions, we are the resource for compliance and onboarding.

Financial risk

Our standardised financials help to assess and benchmark companies globally. We offer financial strength metrics using a range of models and include a qualitative score when detailed financials are not available.

Tax and transfer pricing strategies

We combine our comprehensive company information with transfer pricing functionality, so customers can plan, set policies, manage risk and document compliance processes.

Customers can also fine-tune policies, create robust audit-defence analysis and prepare TP documentation. We’ve created a full document management system to help with BEPS and country-by-country reporting requirements that helps customers become more efficient.

Business growth and strategy

Research new markets and industries, understand the M&A landscape and foreign and direct investment.

Orbis includes information on:

 

Data is getting bigger all the time, which makes extracting value from the numbers more difficult and time consuming. One of the ways that we increase efficiency is by making it simple to compare companies internationally.

Using our solutions, customers can interpret data quickly, and automate and centralise much of their research.

 

In what ways have Bureau van Dijk’s offering evolved over the years?

Bureau van Dijk has been an innovator in private company information since its beginning. We first delivered company information to clients on CD - then DVD-ROMs. This was a ground breaking way for companies to quickly research other companies. While we still offer on-premise solutions, our data and analysis resources today are accessible in the cloud, in third-party platforms and through integration into systems and workflows.

Our products are just as innovative today. For example, it’s not just that we offer the world’s most powerful comparable data resource on private companies, or the extensive corporate ownership structures included within it, it’s often how you can combine datasets in new and innovative ways to create better solutions for customers. For example:

Customers can blend our data with internal data to refresh and enrich CRMs and other internal databases. Our unique company identifiers and bespoke matching services help to create links between disparate datasets across organisations and create single views from data silos.

We recently updated the interface for Orbis and several other products to make them even easier to search for and visualise data with pivot analyses, heat maps, dynamic company structures and more. These and other changes were made based on interactive feedback from our customers. We bring data to life in new ways with reports and dashboards that give a clear, intuitive view into the information that matters most.

 

How important is it for businesses to trust a data specialist like Bureau van Dijk when it comes to data and company information?

At Bureau van Dijk, we’re in the business of certainty. It’s vital that companies know who they are dealing with. Before embarking on a major investment, a new third-party relationship or procurement decision, companies need to have confidence that the information they base their decisions on is accurate and comprehensive.

As businesses can be global and often complex, it's harder to get a clear view of all entities involved and who holds control. We make it easy to analyse management and ownership structures. Orbis includes extensive corporate structures so you can assess the complete group or take the financial stability of the parent into account.

Having a clear view of ownership also helps our users comply with sanctions lists, anti-money laundering legislation and to perform the other crucial due diligence checks that are intrinsic to global business.

 

What are Bureau van Dijk’s goals for the future?

Our mission has always been to provide the most reliable private company data on the market. We will continue to enrich and expand our private company information database. This means identifying and integrating new, reliable information sources and standardising data to make it more comparable and useful for our customers’ decision-making processes.

 

 Contact details:

To find out about our free trial scheme, please visit www.bvdinfo.com or email bvd@bvdinfo.com.

Telephone (London): +44 207549 5000

To catch up on all things construction in Cayman Islands, Finance Monthly reached out to Samuel Marcus Menzies-Small, the Founder and CEO of Small Engineering Limited and SEL Consulting Limited.

 

Can you tell us about the products that Small Engineering Ltd. offers?

The products and effects that we offer our clients are firstly 28 years of Civil and Mechanical Engineering knowledge and experience. My concentrate degree is in Civil Engineering. As for our Civil Engineering (construction firm), we are the first of our kind to provide Quad-lock ICF - a panel type ICF wall system consisting of panels, ties, metal track and metal brackets. Quad-Lock Panels are made with high density, fire retardant expanded polystyrene (EPS) which uses no formaldehyde, HFCs or CFCs. Seven panel types and eight types of plastic ties allow virtually limitless design options, using standard components. R-values range from R-22 to R-59 and more - the highest in the industry.

 

In what ways have your offerings advanced over the years?

From concept to distribution - from a small office in my home after a devastating hurricane (Hurricane Ivan in 2004) and after complete mass building inspections, I was able to analyse an affordable, safe and lightweight system that would get the Island to its usual efficiency.

 

What are the main challenges that you and your firm face? How do you overcome them?

The main challenges I face is separating business with pleasure, as life does need balancing.

The challenges that my firm faces at the moment are connected to the market – I think that every business can agree in this capacity. Every problem has a solution and my piece of advice for finding the solution to your specific problem is to try to be futuristic and realistic, read a lot and don’t underestimate the power of networking.

 

Where do you see the company in 2-3 years?

In 2-3 years, I envision our company expanding into the other Cayman Islands and Jamaica, providing products and services to compliment the issue at hand, whilst offering affordable problem solving.

 

Why should your clients choose Small Engineering and SEL Consulting over your competitors?

We are in a class uniquely by itself. The web of qualifications, knowledge and experience that we obtain along with our clientele fee(s) are slim to none. We are the Ritz Carlton and Audi of our trade.

 

What’s your involvement in the community?

We support The Maple House of the Cayman Islands in respect to the late Joshua J Bodden, The University of the Cayman Islands, as well as local artists and special great minds that are on the rise in the community.

 

For more information, please go to: https://www.facebook.com/SmallEngineeringLimited

A new study of the 50 largest banking groups in the UK and Europe calls for disruptive management strategies to reverse lacklustre profitability across the industry, warning that Return on Equity (RoE) and Common Equity Tier 1 (CET1) ratios are in danger of falling below the average market and regulatory minimum over the next five years.

The European Banking Study (EBS), recently launched by zeb, shows that European banks are lagging behind their international counterparts in profitability and operational efficiency. It goes on to predict four major trends that will dominate the European banking scene from now until 2021 in response to the current unhealthy state of the industry.

“Profitability has become the critical concern for the European banking industry,” said Bertrand Lavayssière, Managing Director UK, zeb. “Actual organic profitability of Europe’s top 50 banks has declined significantly since 2012, and their average RoE has fallen to a level that is about half of what shareholders should expect based on a standard cost of equity calculation.

“And with Brexit looming ever-closer, it’s set to be an even bumpier road ahead. Although the top 50 European banks have strengthened their capital positions with a CET1 ratio of 13.5% in 2016, upcoming regulation and a continuation of the relatively low yield environment will increase the burden on these banks. If banks do not employ disruptive strategies to reverse their own fortunes, they risk becoming targets for acquisition. Without taking decisive action quickly, banks’ profitability and financial strength could deteriorate further by the end of the decade - we could see, in a baseline scenario, RoE fall to 1.5% and CET1 ratios below the average market and regulatory minimum.”

The zeb European Banking Study includes:

You can find a copy of the report here.

(Source: zeb)

Rob Mellor, General Manager at Wherescape, explains the process from data to decision, and how any business, large or small, needs to make its data amalgamation efficient in order to move forward.

They say moving house is one of the most stressful things you can endure. Having moved recently, I can confirm the old adage rings true! And this was despite paying extra for packers to do all the 'hard work'. But here's the thing: the packers didn't really save us much time because prior to them arriving, we had to spend weeks sorting and prepping our belongings into the right piles to then be boxed and shifted! This is effectively what data architects have to do if they choose not to automate the building of a data warehouse.

Imagine if I could automate the sorting of all my belongings into neatly organised boxes. Then imagine if I could automate the sorting of many families’ belongings without having to visit their houses - even taking into account the unique requirements that each individual customer has. In effect, this is what solutions like WhereScape do: help businesses to intelligently automate the gathering of data, and allow them to dramatically speed up the time it takes to drive value from it. Automating the process of data gathering can drive real business value and provide a flexible, templated approach to automation, personalised for every business requirement.

To give a real world example, Xerox Financial Services (XFS), a $2bn business spanning 14 countries, has the challenge of putting all kinds of data requests into its data warehouse and producing rapid, accurate business intelligence for its local leasing companies across 14 countries. The rapid growth of the company led to business structures growing up in parallel, creating disparate data and variations in business processes. In the past, these data sets had to be looked at in individual silos because of their breadth and complexity. This meant getting an accurate overall picture took so long that often the information was out of date by the time it was delivered.

XFS now consolidates and transforms all of its data sets into a harmonised model using WhereScape. Integrating multiple tables of data from each source has enabled XFS to create a variety of management reports, including an up-to-date snapshot of sales performance on a daily basis, allowing senior management to ensure targets are hit.

Over the last year, XFS has doubled the number of automated processes yet maintained data quality and decision making. Whereas previously the business had to rely on a monthly 'cycle' of data, it now uploads data every day allowing agile, fast and effective decision-making based on relevant, timely snapshot and trend data. By automating this data collection process, XFS can also engage more effectively with its partners. Through monitoring the value of each relationship, they have a better understanding of the number of proposals sent in by customers, average deal size and the number of order agreements. And the most tangible outcome? The level of automated credit decision-making has increased significantly without compromising the credit quality of the portfolio with complex statistical modelling being supported by data collected daily and transformed by WhereScape. This is a huge leap forward for XFS.

The only value of data is its ability to drive the right business decision. Yet we constantly see businesses failing to do this because of avoidable failures in how they manage it. The automation process XFS has deployed with WhereScape demonstrates that it doesn't have to be that way. There is a choice, and choosing the right process will drive a significantly improved commercial outcome. Now, if I can come up with something similar for helping with my packing the next time I get to move house..!

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