In today's rapidly evolving digital landscape, organisations are actively exploring innovative ways to streamline financial management. Automated financial systems have emerged as a transformative solution, driven by advanced software and artificial intelligence. Recent data from Prophix's 2023 Finance Leaders Survey reveals a significant trend: 65% of finance leaders are planning to automate half of their responsibilities by the end of 2023. In this blog, we will delve into the potential of automated financial systems and explore how they can revolutionise financial operations.
Automated financial systems are reshaping how organisations handle financial tasks and data management. Research by Accenture suggests that a staggering 80% of financial tasks could be automated, potentially freeing up 60–75% of agent time. These systems excel at automating repetitive financial processes like data entry, invoice processing, and payroll management. By automating these routine tasks, organisations can dramatically reduce the risk of human error, leading to improved accuracy and reliability in financial reporting.
In the realm of finance, timely and accurate data is the cornerstone of informed decision-making. A Workday Adaptive Planning survey reveals that over 40% of finance leaders consider the demand for faster, higher-quality insights as the primary driver for automation within their organisations. Automated financial systems come equipped with robust reporting and analytics tools, providing real-time access to financial data. Decision-makers can harness this wealth of information to generate insightful reports and dashboards, offering a comprehensive view of their organisation's financial health.
In the financial sector, where regulatory compliance is vital, organisations allocate a substantial portion of their operational expenses. Approximately 10% of their annual operational costs, nearly $270 billion, go into meeting these stringent requirements, with additional expenses exceeding $321 billion, including fines. In this context, robotic process automation (RPA) proves invaluable by automating not only repetitive tasks but also ensuring adherence to stringent compliance norms. Automated financial systems play a pivotal role in streamlining compliance efforts by maintaining a comprehensive audit trail of financial transactions and securing data through robust encryption, access controls, and authentication mechanisms, thus effectively reducing the risk of data breaches.
Concurrently, a recent study by Juniper Research underscores the growing global cost of eCommerce fraud, projected to exceed $48 billion in 2023, up from slightly over $41 billion in 2022. The study highlights the imperative for fraud prevention vendors to prioritise platforms equipped with AI-powered risk-based scoring, capable of adapting to various payment methods, and adept at responding to evolving market conditions. This approach not only simplifies compliance reporting but also conserves valuable time and resources.
While implementing automated financial systems entails an initial investment, the long-term benefits are substantial. Deloitte's research indicates that financial service firms can reduce costs by up to 20% through automation. These systems lead to cost savings of 40–60% in processing time and cost. Autonomous Next research estimates that the aggregate potential cost savings for banks from AI applications could reach $447 billion by 2023. The reduced need for manual data entry and the lower error rates contribute to these savings. Additionally, enhanced decision-making capabilities often result in better financial outcomes and improved profitability.