The financial services industry is changing rapidly, and technological innovations have had a lot to do with that.
Companies are rapidly adopting tech strategies to appease their customers. From online and mobile banking to social media customer service, financial services firms have a lot on their plate right now.
Many of these companies are struggling to keep up with these expectations, however, because of two issues in particular:
1. A lack of qualified staff members. This is a concern for 83 percent of financial institutions worldwide, according to a recent study by Robert Half.
"This is creating challenges in finding the requisite staff to capitalize on emerging opportunities," said Nick Owen, global practice director at the organization. "Competition for the industry's top talent continues to intensify for middle-office and support roles, particularly accounting and finance, as well as operations positions."
2. Difficulties relating to company systems, particularly as they pertain to data access and transparency.
ERP software to the rescue?
Aside from employee shortages, most of the challenges that financial services firms are expected to face in 2013 revolve around technology. That's the opinion of Lee Kidder, a practice director with CCG Catalyst, who outlined these obstacles in a recent column for Bank Systems & Technology.
Fortunately for companies in the industry, they don't have to face these growing challenges alone. A survey conducted by Incisive Media and Computing polled 150 business leaders about the top benefits of enterprise resource planning (ERP) software – many of which can combat the challenges that Kidder discussed in his column, including:
– Regulatory compliance: After the financial crisis hit, legislators passed a number of regulations relating to personal financial information, such as the Dodd-Frank Act.
Aside from healthcare providers, financial service companies have more regulations to adhere to than organizations in any other industry – and the number of audit requests is expected to rise significantly going forward. But old data systems have made it difficult for these companies to establish the transparency they need to meet comply with these requests easily and in a timely manner.
This is where ERP software comes in.
The Incisive Media/Computing study found improved regulatory compliance to be ERP implementation's fifth biggest benefit. Nearly 60 percent of respondents anticipate the software playing a significant role in meeting compliance standards going forward.
– Inaccurate reporting: Not only does this pose a problem for compliance, but it has an adverse effect on nearly every business process for financial service professionals. Customer service functions, online banking capabilities, even just billing and accounting activities – all of this is made more difficult without accurate filing and reporting.
Financial reporting is the No. 2 advantage of ERP software, cited by 70 percent of respondents to the survey. Directly behind it is "less duplication," which is proving to be a major time-saver.
Needless to say, these benefits have the ability to make life easier across the board for financial service professionals.
– Streamlined business processes: Kidder highlighted the disadvantages brought about by legacy systems and siloed databases, including inefficient business processes and poor data management.
It is very difficult to provide consistent information across the workplace with on-premise systems, and even harder to grant access to employees across the workplace. This has led to a variety of pitfalls, such as poor communication and collaboration, and a substantial amount of wasted time.
Taking the No. 1 spot in the Incisive/Computing study was making uniform data available to everyone, as opposed to having "multiple versions of the truth." That way, organizations will be able to save time, cut down on errors and achieve better cross-departmental collaboration – the fourth-highest ranked benefit of ERP software.