In today’s economic and corporate environment, it’s more necessary than ever to foresee change, respond rapidly to global trends, and adapt to changes in consumer and market expectations. Financial institutions like banks and insurance companies, finance departments have special roles to play. These offices carry the tremendous responsibility of overseeing company resources and ensuring that they move through the right channels. Nowadays, however, chief financial officers (CFOs) and their teams take on additional burdens for their respective banking and insurance businesses. Finance is now seen as less like a support area and more like an area that can determine overall strategic growth. That means that CFOs are often consulted by other executives for financial and business insight that can truly set the strategic direction of their home organizations.
It’s a given that when a company grows, its operations get more complicated. They begin to handle more money, manage more employees and clients, and make more significant and little business choices at the same time. As a firm grows, the number and complexity of the accounting work it has to do will undoubtedly increase.
If you’re a key figure in your organization’s finance department, and if more people are expecting you to take the lead, it may be time for you to consider investing in finance modernization. Companies may use automation technology to streamline their accounting operations, save operational expenses, and provide a single, unified data source for all accounting data.
The best aspect is that “off-the-shelf” accounting software can now be easily accessed by any firm, no matter how small or homegrown, without having to pay high prices for proprietary systems used by major corporations. In this context, upgrading your data assets and fortifying your digital business infrastructure for banking or insurance should be among your top priorities. Undergoing a finance modernization could be a transformational experience not just for your finance department, but for your organization as a whole. To illustrate, here’s what financial organizations like banks and insurance companies can expect when they shift to modern finance platforms.
Modern Financials Empower Finance Teams to Act Quickly, Decisively, and in Line with Organizational Values
Too many financial institutions are stuck with siloed-off and disjointed legacy data systems that prevent them from having full visibility over their financial situation. This, in turn, delays their implementation of business-critical financial decisions.
As a leader in your finance department, your goal should be to modernize your current finance system so that all that processes lead back to an accurate outcome or a repository of financial data that are always consolidated and updated in real-time. This is what will allow you and your finance team to have the clearest possible view on your global chart of accounts and make quick but accurate calls on important financial matters—for example, when and how to shorten your close cycles. Hours of tiresome, manual labor may be eliminated by automating the “conventional basics” of finance, allowing your team to focus on analytic and predictive tasks. Reduced closing cycle times, enhanced automation of the balance sheet and operational reconciliation procedures, and increased productivity are all benefits of automation.
If you and your team are empowered to make more responsible financial decisions, the effects on your organization will be immediate. The majority of team members will immediately recognize the company’s investment in them and will welcome the chance to work on projects that are more demanding and rewarding. We’ve also discovered that working with the best software is something that team members love – and often boast about. But you will have to lay the groundwork first, and that can only happen if you confront the problems of your legacy system.
Finance Modernization Can Improve a Company’s Outcomes for Its Key Performance Metrics
For the future, every company has aims and ambitions. It may be to increase the number of clients or consumers, or it could be to expand the company and recruit a few more workers to meet the demand. There must be short-term goals that are clear and quantifiable in order to reach any of these long-term objectives. This method effectively divides the company’s growth into weekly or monthly tasks.
It is simply not acceptable for a financially driven organization like an insurance company or a bank to be abstract about its desired business outcomes. Both types of businesses need a good handle on the numbers that signify the fulfillment of their key performance indicators (KPIs). Setting goals and establishing KPIs is a time-consuming process that may frequently be sped up with the help of a CFO who works for a third party. An outsourced CFO can tell you what a firm can and can’t afford, as well as evaluate the financial risk of any future corporate expansion strategy. In this regard, investing in finance modernization can help you achieve clarity on how to fulfill these outcomes and how to judge your organizational performance according to your own unique metrics.
The rationale is simple: if an organization becomes better at measuring its performance, it also stands to become better at actually improving that performance. This is your cue to take advantage of financial modernization and retool your performance metrics for profitability, success at expansion through digital channels, success at launching new products, and the like.
Modernizing Finance Will Make Regulatory Compliance Easier
Regulatory compliance is a shared pain point for banks and insurance companies. It’s always been a special challenge for both types of organizations to keep up with the requirements of their respective regulators. Officers in charge of compliance should also remember that standards evolve. There’s always a chance that the succeeding year’s requirements may be more complex and stringent than the preceding year’s.
Fortunately, modernizing your finance system can address many of the woes associated with compiling regulatory reports, such as culling data that’s up to date and generating complete regulatory compliance reports according to a specific format. You can make a big difference to your organization’s compliance efforts by shearing down both the overhead costs for completing such tasks and reducing penalties for passing late or non-compliant reports. This will change the way you are seen by your regulators and put your organization in excellent standing with them.
Modern Financials Will Enable a Data-Driven and Forward-Thinking Perspective for Doing Business
Both banks and insurers will benefit from adopting more data-driven approaches for matters that broach finance, like portfolio management and customer enrollment. If you embark on a finance modernization, one of the things you and your team can look forward to is the extended use of data analytics. The data analytics tools on your new solution can help you garner valuable insight on what types of products resonate with either individual or corporate clients, or which channels are currently seeing the most growth and are worth developing further.
Adopting a more data-driven perspective will allow your team to develop better foresight for market trends and key market events. If your organization has the advantage of foresight, it can capitalize on new business opportunities at precisely the right time.
Finance Modernization Guarantees Greater Mastery Over Enterprise Risk
As financial institutions, both banks and insurance companies have to deal closely with the issue of risk. Even when the beast of unanticipated circumstance rears its head, it is the responsibility of management to make appropriate preparations to guarantee that processes are in place to continue meeting goals. Finance teams work closely with other departments to formulate risk management strategies that can curb the impact of financial loss.
Given the overall uncertainty of today’s business environment—due in large part to factors like the COVID-19 pandemic and the global economic crisis—both types of organizations need to enhance their visibility over their risk situation, as well as their readiness to roll out risk reduction and risk management plans.
A modernized finance system will allow a CFO and their team to be less intimidated by the idea of risk and to apply the right risk-related solutions with level heads. Having a unique and open plan for these risks will make a company and the organization have its goals fulfilled in any of its segments. Good communication and coordination between departments will make not only the business profit better but will also build a good reputation on its clients and partners.
Towards Revolutionizing Your Organization for the Future
In summary, if your finance modernization process goes according to plan, the result will be a synergized, resilient, and technically proficient finance team that can hold its own in the strategic decision-making of its organization.
When it comes to the current digital transformation, this can help your company keep up with the times by ensuring that it can continue to operate, secure income sources, reduce operational costs, collect funds quickly, streamline processes, maintain a positive customer experience, prioritize tasks, and increase efficiency, all of which are critical during this time of crisis.
Procurement, payroll, time and attendance monitoring, helpdesk assistance, expense approval, employee onboarding, and other processes may all be automated in this way. Consider modernizing your own company today, and transform your bank or insurance brand into a formidable stakeholder in the future of its industry.