The Workflow Horizon for the Financial Sector

When your charge is streamlining operations for a segment so large that it touches everything from Main Street fiscal management to the integrity of global capital markets, the stakes are certainly high.  When your list of considerations spans Dodd-Frank legislation, money laundering mitigation and the lightspeed pace of fintech innovation, the space is also anything but boring.

Three frontline thought leaders serving the finance sector from the investment banking, management consulting, and IT services perspectives share their sage workflow insights and predictions for the coming year here as a roadmap for tomorrow’s management success.

The Power of Influence

So what key factors are having the largest directional influence on workflow in the finance realm? Our experts paint a picture of warp speed institutional change, growing demand for accelerated productivity, and substantial investments in regulatory compliance.

Focused on workflow, case management, artificial intelligence (AI) and robotic automation solutions at KeyMark, Chief Expectation Officer Jim Wanner sees two key things impacting the sector. Speaking to the consumer and commercial retail banking industry, Wanner says, “In recent years, there has been a significant focus shift from meeting legislative and reporting mandates to improving institutional productivity and the end user experience.”

He explains, “The linchpins of an enhanced user experience and institutional productivity are systems speed and accuracy. Both streamlined mobile application interaction for end users and the ability to handle back-office transaction exceptions are vital requirements in the sector today.”

Silicon Valley Accountants CEO Gabriel Zubizarreta points to the accelerating rate of change in business as the key influencer of workflow management today.  “Mastering the balance between the perpetual climate of change in business that isn’t going away anytime soon and the need for financial reporting accuracy is really the headline. In the world of accounting, financial exceptions require ad-hoc human intervention. During the accounting close cycle, a medium-sized public company pushes more than a thousand spreadsheets, and I see the remnants of everything that doesn’t work here. It’s a significant collection of exceptions flowing down the sink trap that ranges from new contracts and inventory adjustments to AP issues and mergers requiring complete financial statements, and usually requires changes that need to be fixed within days.”

He explains, “Most companies in business today demand incredibly agile means to keep pace with this rate of change, but recoil at the thought of ad hoc spreadsheets and analysis. The reality is that in order to move mountains we must be nimble and innovative, not reliant on monolithic enterprise systems when we’re merging with another company tomorrow. The dichotomy between these two approaches is a world apart.”

According to Asif Iqbal, principal business analysis consultant at BNY Mellon in London, there has been substantial impact in recent years on global finance workflow owing to both regulatory developments and sheer market growth. From the front office technology perspective of a global investment firm, he shares, “For nearly the last 20 years, the electronic trading world has increased in size each year. Within that time there have also been a lot of changes around regulation, control and compliance. By default, the process flow for things like trade bookings have led to substantial institutional investments in analysis and enhancement.”

Highlighting the magnitude of that regulatory impact for global investment firms, he explains, “In the past, regulation wasn’t a standalone piece of the workflow pipeline. Today, whenever a new financial product is introduced, most banks must deploy an entire regulatory team to ensure it’s compliant. As you can imagine, the regulatory space is quite an active market for hiring in the wake of this change, with activities oversight spanning everything from trade booking and data management to discrete trading algorithms to trading desk functions. In the end, it’s had quite a huge effect on financial institutions.”

Tomorrow’s Game Changers 

So what solutions are best positioned to respond to these leading market influences in the coming year? Our front line predicts a lineup that must toe the exacting regulatory line, boost productivity, accelerate innovation, and all but eradicate human error.

Exception Focused Workflows

Driven by the resounding need for both productivity and accuracy, Wanner predicts a significant departure from convention in workflow delegation from an IT perspective. “Within the next five to 10 years, I believe there will be two chief criteria for delineating finance sector workflow: what can be automated, and what can only be accomplished with a human. Mundane tasks will be relegated to an RPA-fueled ‘digital workforce’ that automates predictable and routine processes, with manual workflows focused solely on complex financial exceptions assigned to highly skilled individuals.”

He foresees a future of finance professionals operating alongside digital workers that handle routine tasks, delegating anomalous occurrences to them via clean and easy-to-use electronic case management system interfaces powered entirely by workflow engines. “There is a real opportunity right now for RPA to drive processes linked to a digital workforce. I think the reality is that there will be an implementation ramp-up here, and the lion’s share of the workflows reserved for human brainpower will be focused on the exceptions alone.”

Systems Integration  

“Few organizations are thinking far enough ahead about meaningful systems integration, but utilizing today’s standalone technologies within single-source solutions is really the leading opportunity for workflow in the finance space,” reports Wanner. “To be successful, integration at three levels is necessary. First, low-level optical character recognition (OCR) capability that can accurately read information; second, case management systems driven by workflow technologies; and third, a rules engine fueled by robotic process automation (RPA) technology to ensure you’re digitally automating mundane tasks.”

Take mortgage solutions for an example of this integration. The Quicken Loans-powered Rocket Mortgage app is a prime example of a workflow solution leveraging the smart integration of these three readily available technology engines to create a single interface. This powerful interface automatically shares applicant data with multiple lenders, creates financing customization based on applicant’s financial profile, and offers full loan management beyond the mortgage closing. Integration of these standalone technologies ensures not only accuracy, but profitability in the form of next-level customer interaction that drives business growth. There’s no question that greater acceptance and adoption of these integrated technologies will create a win-win situation for both end users and institutions.

Process Optimization

Zubizarreta says there is no magic bullet for finance sector workflow. He believes the winning formula of the future is strategically leveraging human capital and existing in-house technologies.

“The ingredients for successful workflow optimization are people, processes, systems, and people,” he shares. “Everything begins and ends with your people. They are the foundation of all process improvement and system adaptation. It’s not about onboarding a shiny new system, but optimizing existing processes and fully leveraging the technology you have. People are the most important workflow asset, and while most companies believe in training, the same proportion don’t actually deploy it. Simply taking existing back-office processes and educating the staff in lean, agile methodologies for their continual refinement improvement can lead to monumental improvements in efficiency.”

From a technology perspective, he adds, “Just as the world can’t get to a single language or currency, there isn’t just one solution, but a mosaic of solutions based on unique business challenges, changes and objectives. Many people start with enterprise resource planning (ERP) software and build off that, but that’s backward,” he cautions. “Your back office doesn’t drive revenue or win new business. No one is saying ‘I want to do business with that company because their accounting department is the best in the land.’ Better to focus on what touches your customers directly and drives innovation — and leverage that from a customer revenue growth perspective.”

He also notes that opportunities abound to fully leverage existing investments that are already installed internally. Speaking from years of front-line experience observing companies leverage technology, he shares, “The other germane consideration is that no one can confidently say they’re fully leveraging the technology solutions they’ve already onboarded. Relative to their larger goals, most companies utilize just 50 to 60% of their current systems’ functionality and benefits.”

Proprietary Technology Development 

Iqbal predicts a tsunami of fintech innovation in the short term, responding directly to present-day workflow needs.  “In my view, there will be more technology-based solutions in the future, validating data points, automating manual data quality checks with algorithms that detect and track anomalous patterns in trades and stored data for human investigation. Anyone who has worked in the financial industry over the past three years has seen the massive volume of new technology being developed – from AI-fueled trading algorithms to R3 LLC-developed blockchain. That said, there’s still a lot of opportunity right now for innovation, as large financial institutions race to invest in fintech startups to see where they’ll end up.”

He adds, “A whole different dimension exists beyond workflow efficiencies alone. Big banks want to be part of that innovation, ahead of the curve and first to market with the next Uber. There’s no shortage of pilot technology in the market right now pointing to that. Linked to more robust banking security and streamlined process workflow for financial institutions, at least one Tier 1 global bank is looking at face recognition technology already being leveraged in China for its consumer banking arm.  But institutions aren’t stopping there. Many are also going beyond the fintech startup landscape and building their internal technology bench to develop proprietary technology in-house. Earlier this year, Citi announced its hiring 2,500 new programmers to begin building its own financial technology, as an inroad to leveraging that opportunity.”

While all of our thought leaders vary in their workflow forecasting purviews, all would agree – the future will be anything but dull for the segment.

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Noelle Kull is Principal of KCI, a strategic communications consultancy based in Chicago. A trusted partner to startups and the Fortune 100 alike, she translates thought leader insights to compelling content in verticals spanning med tech and manufacturing to higher ed and beyond. A global citizen passionate about cultural exploration and modern technology, you can find her penning magazine bylines in Budapest, ghostwriting books in Chiang Mai, and leading desk-side media tours in New York City.