How Digital Transformation Can Keep The Financial Services Sector Sustainable

How Digital Transformation Can Keep The Financial Services Sector Sustainable

By: Stanton Jandrell, CEO of Fraxion 

While 34 percent of companies have already undergone digital transformation, there are numerous others still using outdated processes of the past. In the financial services sector, this is often paper or spreadsheet-based spend management. These type of obsolete systems open the door for human error and misplaced documents, especially since employees might end up filling out forms with the wrong information, which ultimately wastes everyone's valuable time. Mistakes like this not only affect operational efficiency, but can be detrimental since the sector is managing every financial aspect of an organization and a mishap could lead to false net income or even budgetary insights.

When was the last time your company upgraded its spend management system? If you don't know the answer, you're most likely losing ground to competitors who have upgraded and modernized their approach. Organizations who are moving slowly are most likely doing so because of antiquated systems, and this affects overall sustainability long-term. So, how can digital transformation and modernized systems help the financial services sector remain relevant? Here are three reasons.  

Improve efficiency
Maximizing internal productivity is an effective strategy to keep up with competitors and remain sustainable. One of the best ways to increase overall productivity is to optimize individual processes to make them more efficient. Recent research from APQC found that today's fastest growing companies can submit orders and approvals in five hours or less, while slower organizations take almost two days. Slow-moving processes such as this, are most likely due to outdated, or paper-based systems. Have you ever submitted a form assuming it would be processed immediately, but it gets lost along the way? Digital transformation not only helps bring front office operations up-to-date, but also creates back-end automation by removing the need for human intervention with simple submission processes. Upgrading to modern spend management systems, such as cloud solutions, will accelerate all spend management processes and lead to added value for customers and increased productivity overall. 
 
Limit rogue spending
Rogue spending is typically described as spending associated with staffing suppliers outside of pre-negotiated contracts or the company guidelines, which is unfortunately fairly common. Many employees have admitted to purchasing something without going through the proper approval channels, and the slow pace and complexity of paper-based approvals are often a contributing factor to this rogue spending. Within cloud-based spend management systems, employees can get approvals at anytime and from anywhere due to remote capabilities and a completely user-friendly dashboard, rather than pushing various pieces of paper to multiple parties. Utilizing an updated spend management system can dramatically reduce rogue spending, which immensely improves the bottom line. For example, one study found that lowering rogue spending by just five percent can save an organization millions of dollars. 
 
Reduce waste
Businesses waste money every year on unneeded or outdated technologies. However, when organizations put digital transformation initiatives in place and work on updating their technology, less money is lost. Modern technology and automation can save a business up to $4 million annually. Reduced waste and business spend helps create a more sustainable long-term spending strategy and increases the financial health of an entire organization.
 
Having the ability to remain sustainable is essential in every industry, and updated technology is one way to achieve this goal. This is especially true in the financial services sector. Businesses need to be able to make quick approvals, reduce rogue spend and also limit overall monetary waste to remain competitive. Luckily, new and improved spend management systems are available to make it happen and help any organization digitally transform.

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