Boosting productivity with technology can aid economic recovery in the financial sector.
Uncertainty remains high in the United Kingdom as the country prepares to enter an economic downturn. To face the challenges ahead, the financial services sector must adapt and re-evaluate how technology is being used, leveraging its benefits to position businesses for economic recovery and, ultimately, growth.
From City banks to FinTech startups, businesses of all sizes should ensure they use technology to optimize processes and increase efficiency, productivity, and performance. Importantly, they must re-engineer now, so that, when growth comes, process volume increases can be absorbed without adding new resource costs Going forward, embarking on effective digital transformation programs, which are key to compliance, providing better customer experience and achieving faster time-to-revenue, will also be crucial to boosting productivity. This, long-term, will have a significant impact on sector growth, and the UK maintaining its place as a leading global financial hub.
TECHNOLOGY TO IMPROVE THE REGULATORY PROCESS
The ever-evolving regulatory landscape catalyzed greater intervention from regulators in 2022, through measures such as the Economic Crime Act, which placed an emphasis on Ultimate Beneficial Ownership (UBO), as well as landmark fines and enforcements against organizations in relation to non-compliance. In turn, the necessity for more robust and efficient Know Your Customer (KYC) and Anti-Money Laundering (AML) processes increased, emphasizing the growing need for the benefits that can be realized through KYC transformation.
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The Edinburgh Reforms and Autumn Statement also recognized this necessity through legislation, with the Chancellor of the Exchequer, Jeremy Hunt, setting out the aim of the UK taking advantage of its “Brexit freedoms.” The Chancellor also outlined a goal for the UK to become the “world’s most innovative and competitive global financial center” by repealing and replacing hundreds of EU laws to establish a smarter, more agile regulatory framework.
To make the most of this framework, by benefiting from its agility while ensuring the highest standard of compliance, financial institutions must prioritize innovation. Positioning for economic recovery and future growth will require many businesses to overhaul their internal infrastructures, embracing state-of-the-art cloud technology powered by automation.
KYC transformation, built on cloud automation, is faster to deploy and more easily integrated into other applications than traditional on-premises infrastructure. It can greatly improve the regulatory process by increasing the speed and accuracy of compliance checks, and significantly minimizing the risk of human error while reducing cost. This is done by minimizing the need for human intervention, which can involve hundreds of analysts.
Especially important given the increasing regulatory pressure observed, technology can offer control and reassurance that processes are being carried out correctly and consistently, also impacting business productivity through a higher quality of case completion due to the removal of errors inherent in a manual process. As financial institutions embark on their transformation journeys, they should also utilize technology that interoperates across multiple customer and transaction data sets, while respecting data privacy for each jurisdiction, to consolidate their data processes. It is also important to maximize the re-use of data to minimize the number and depth of outreach steps to clients.
Technology is a powerful tool for improving the efficiency, experience, and execution of core business tasks, and one that will continue to play a significant role in tackling the pertinent issue of financial crime – a prime factor in facilitating economic growth.
FREEING UP STAFF TO PROMOTE PRODUCTIVITY
Automation, particularly, is also a critical enabler for staff as financial institutions position for economic recovery, reducing the reliance on manual processes to manage manual data searching.
KYC tasks can be executed through automation to greatly empower people, and to the advantage of the business. Taking client onboarding as an example, relying on manual KYC, analysts spend much of their time finding data, and even longer analyzing it. Technology can replace most of this effort, with successful KYC transformation resulting in added value, motivation, and productivity for analysts. This comes through focusing on their experience and judgement and allowing them to spend time on critical tasks that really require their intervention.
This way of working also offers the opportunity to rethink both the way KYC analysts operate and the work they do. While human touchpoints with are still needed to ensure systems run optimally, freeing staff up – and for potentially tens of hours a week – thanks to automation can have a massive impact on business productivity, experience and, ultimately, the bottom line.
HOW BUSINESS PRODUCTIVITY ASSISTS ECONOMIC RECOVERY
Forward planning for economic recovery will be key to laying the groundwork for post-recession growth, and thinking of digital transformation and solutions now is an important part of that.
The shift towards innovative technologies can have a significant impact on a business, from both an efficiency, and staff availability and satisfaction perspective. Re-shaping the way businesses tackle regulatory processes can enable them to scale and grow, having a collective knock-on effect on the economy.
The financial services industry is central to the strength of the UK economy, contributing £216 billion a year, according to His Majesty’s Treasury. Here, the sector also employs 2.3 million people and serves as a large regional outlet, with 1.4 million of those working outside London.
With the powering of institutions’ processes and output through technology, the sector’s status as a leader can continue to be enhanced and, crucially, the economy will be in a better position in the years to come.
