Alternative tech costs spiking during crisis

25 January 2021

2020 will go down in history as a tumultuous year. We are in a defining period of time, challenging human ingenuity, perseverance, and priorities. Adapting to change can be painful and uneasy and it takes time to realise the opportunities for improvement it presents.  

Businesses are compelled to face the reality of change and deal with it right now. Many have suffered in faltering markets, disrupted supply chains and regulatory uncertainty. Competition has intensified and has pressured enterprises into strategic and operational revision. Some dared no further than damage control and conservation measures such as sweeping and often indiscriminate cuts, lay-offs, and reliance on government stimulus. Others accepted the fact that there is no way back to old ways and chose to future-proof their business plans.

Spending cuts are commonly on the table when firms buckle up to weather a sudden change in the odds. However, putting technology adoption on halt might backfire. Management discretion to press forward with digital transformation projects pays off in the long term, as the return on investment in technology to enhance efficiency often outweighs potential savings.

Process improvement and optimisation, although widely endorsed, often faces internal procrastination. In some instances, there can be internal resistance or little awareness of the latest technological breakthroughs. At the same time teams struggle with repetitive, manual, error prone tasks. For finance and accounting it is especially true, particularly when it plays a business critical support role.

In reconciliation automation, ReconArt area of expertise, we have extensive experience with one of the most conservative, regulated and risk aversive financial industry segments – banking. Its complexity and cornerstone role in the finance ecosystem is underlying widespread fintech innovations. Yet, within transaction matching and period-end close solutions, it is staggering that spreadsheets are still the prevailing tool to tackle enormous data flows. The banks showcase the imperative to mind data security
and quality, scalability, regulatory compliance and reporting when reconciling accounts.

But besides banks, large volume transaction processing is a core activity for industries such as remittance & payment, retail & e-commerce, investment management, insurance, among others. The F&A teams encounter the same challenges though in a different scale. Many are preoccupied with mundane and low-value chores of ticking and tying which saps resources to the detriment of higher priority and higher return tasks. Automation is a synonym for time savings. In reconciliation that is an undisputable fact. The most cited immediate benefits for ReconArt clients are better human resource utilisation, improved motivation and productivity, and even workload distribution across the calendar. Those returns on the investment in the right reconciliation solution invariably weigh in favour of implementation and are the first to factor in by the decision makers.
Dealing with poor data quality and multiple data feeds in disparate file formats is another controversial matter. Manual data consolidation is untenable and the lack of standardization erodes successful matching results. However, this can be easily resolved through the automated normalization and enrichment functionalities of the modern reconciliation solutions.

The dramatic reduction of human intervention in the reconciliation routine carries precision and efficiency only achievable in a machine-driven environment. ReconArt pursues end-to-end rule-driven automation to eliminate the risk of human errors and to sort out ever-increasing amounts of complex data. Reconciliation specialists know the wide variety of recon scenarios and peculiar cases they regularly stumble across. The recon system that would orchestrate the multitude of process steps without omissions or technical errors, consistently identifying matching groups by the user configured strictly logical blueprint – that is a recon system that would prevent losses for the company.

Another important aspect of automating reconciliations is enhanced reporting transparency and multi-level control on financial streams. The analytical value of reconciliation data for informed decision making is immense and has been discussed before. Acting preemptively based on reliable, actual, up-to-date insights delivered by a sophisticated recon platform generates savings and reveals opportunities for improvement that are evident and measurable.

Reconciliation teams searching for the perfect technology fit are often wary of the learning curve and the ease of operations a new tool can offer. They are reluctant (and rightfully so) to bet on an unwieldy, heavy maintenance system that would address their needs only partially while complicating their lives additionally. They need guarantees that it would recognise their business specifics, keep up with their pace and would not become obsolete in the long run. The potential disruption associated with migration to a new system and hidden costs occasionally arising put off the decision to automate.

ReconArt meets and exceeds expectations in terms of scalability without incurring punitive costs on expansion and change. It is designed to be an intuitive, adaptable, truly business owned tool governed by its daily users. It is a best practice solution that undergoes regular updates and the product evolution roadmap considers and includes enhancements in functionality based on user feedback.

ReconArt is a fully configurable platform which does not require customisation, heavy infrastructure or professional services to run. The platform integrates seamlessly with other systems. During the initial implementation, process discovery, and user training prevail over technical preparations typical for installed software. ReconArt is entirely web-based solution hosted in the cloud with zero footprint on clients’ computers. Users can securely access the platform even when the financial team is forced to work remotely and the smooth team collaboration is at stake.

Whatever concerns, doubts, or New Year resolutions businesses might have, technology adoption during a crisis should not be put on a backburner. Postponing investment in efficiency and arguing that this is part of the plan to slash expenses does not make much sense. The ultimate survival tactics during trialling times is not some form of hibernation but actively pursuing competitive edge through operational excellence propelled by technology.

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