The Impact of Finance Automation on Business
The Impact of Finance Automation on Business
Everywhere we look, the world is becoming more automated. Some of that automation impacts our everyday lives, such as the driverless cars being tested by Walmart. You can find robotic gas pumps now, and as Verizon Connect explains, smart cities are also on the rise. They’re not a new idea, but the technology used within them is evolving all the time, from district heating to street lighting.
Automation within a business is also a growing trend, from hiring and firing to finances. Financial automation is the term used to describe the process of leveraging technology to complete tasks with minimal human intervention. These would be tasks usually performed by humans, for instance, payroll and balancing ledgers. The idea being that business will free up employee hours to work elsewhere within the organization.
Research has shown that technology currently in use within the industry could fully automate 42% of financial activities; this includes such elements as advanced financial analytics, process automation and robo-advisors dealing with financial queries. The bigger the organization and the wider the financial scope, the more effective automation can be.
In the past, automation has lacked the decision-making skills that a real person brings. Still, as we surge deeper into the 21st century, technology is becoming advanced enough to perform such tasks. This is known as robotic process automation (RPA), and it is more developed than simple macros and scripts. An RPA can perform complex and repetitive tasks very quickly, delivering two key benefits to a business. The first, and most obvious advantage, is freeing up employee hours. A repetitive task can tie a person up for a long while, costing the company money it could either spend elsewhere or not spend at all. Secondly, these tasks are performed much quicker by an RPA, which streamlines the process and delivers outcomes almost instantly.
Artificial intelligence is another key aspect of finance automation; it is also the basis for much of the automation we see in the world around us. Smart cities run because of artificial intelligence, computers making decisions based on data. This machine learning demonstrates how large data streams can be analyzed for patterns and suggested solutions that benefit people. This might be heating patterns within a smart city, but in the finance sector, it could be choices to improve a company’s financial efficiency.
All of this sounds fantastic, but there are obstacles that a company must seek to navigate to implement financial automation smoothly. The first is integration, getting the correct balance of human input and automation. Throughout history, humans have rallied against technology and automation; even in the 18th century, the Luddites rallied against the implantation of such technology. We’re unlikely to see the same reaction to financial automation. However, the correct balance still has to be struck, and companies must automate services with the greatest empathy towards those being replaced. Effectively, we could see employees previously deployed in the finance department placed elsewhere, such as sales or customer service, to better the customer experience.
In terms of benefits, the time saved can be used elsewhere within the business. Most companies have customers, and putting humans into key CRM roles is a great way to use the additional human resources or salary costs that have been saved. By automating the business’s processes but investing in the front of house, a company should improve areas simultaneously. Financial processes will be swifter, more accurate and less costly, but ultimately the human element of industry will not be lost; they will simply be redeployed elsewhere to drive the business further forward.
Financial automation is a huge win for businesses if they manage the process sympathetically.
If you enjoyed this article, you might also enjoy our piece titled ‘Optimizing the Commercial Lending Process for Community Banks’.
To find out more about Finance Automation:
If you’re ready to automate your financial processes and work more efficiently, TrellisPoint can help. We’ll show you how you can leverage the power of Microsoft Dynamics 365 to streamline customer-facing and internal workflows to benefit your financial institution, including our product called Virtual Loan Assistant.