The Top 4 Spend Management Challenges Financial Service Firms Face
From barter to bitcoin—in an industry driven by modern technology, the financial services industry has had to continually adapt to navigate through change. Heavy compliance regulations like SOX and FINRA, have also forced companies to spend their budget differently, prioritizing the reduction of fraud and other risks. With smaller budgets dedicated to employees, finance teams are starting to rethink the way they handle employee spend.
Life a Generation Ago
Imagine the year is 1993. “Oh, the simpler times...”
The average cost of a house is $113,000, a gallon of gas costs $1.16, and a movie ticket costs $4. Jurassic park was the movie of the summer, Bill Clinton was president, the first “Got Milk” ad had just aired, and Apple had just shipped the first Newton.
Are you there yet?
In 1993, the world was much different and so was the financial industry. The US economy was recovering from the 1989 junk bond crash and the 5th largest investment bank, Drexel Burnham Lambert, had just been forced into bankruptcy. Over the years to come, the financial industry would change. More industry scandals would surface, and compliance laws and regulations would be created.
Today, the financial services industry includes much more technology— forcing it to be highly focused on combating fraud and protecting its data. And in a highly regulated and data-concerned industry, spend management challenges can become difficult to face alone.
So, how can you protect your business?
1. Budget around Compliance Chaos
Money has a major impact on people, businesses, and the global economy, so it’s no surprise that the financial industry is one of the most heavily-regulated industries in the world. When keeping up with compliance regulations like SOX, FINRA, and the FCPA – a real monetary investment is required. According to a recent survey by Duff & Phelps, 24% of financial services executives said they already expect to spend more than 5% of revenue on compliance by 2023.
With compliance and transparency being a high priority, here are a few things you can do to better control budget spend:
- Simplify employee spend
- Automate expense reports
- Make employee spend central and visible
2. Even Minor Fraud Hurts—Prevent it
Fraud isn’t always purposely malicious. Sometimes it’s a minor business dinner that really wasn’t a business dinner, or an accidental placing of an expense in the wrong cost category. Point being, big or small, malicious or not, fraud can hurt your company financially and impact your brand’s reputation. A digital spend management solution that connects all spend data can make complying with travel and expense policies easier, make intentional fraud more difficult, and help identify fraud faster.
Here’s what you can do to help prevent it:
- Utilize an automated spend management solution
- Incorporate a corporate card program
- Automate data entry
- Incorporate data analytics
3. Give Finance an Upgrade
Even though technology has vastly changed the financial services industry, some of the largest enterprises are still years behind in updating its technology and processes. For those companies specifically—not all digital disruption is created alike. Using an automated solution can help you better handle spend and save money in your budget. How can you give finance an upgrade?
Find an automated solution that can:
- Streamline employee expense operations
- Gain visibility into employee transactions
- Become agile with real-time insights into costs and business performance
- Optimize for better cash management
4. Your Business on the Road
Business is conducted in more places now than ever. Whether it’s starting your morning at home or traveling on a trip, employees expect to be able to work just as well outside of the office as they do at their desk. Too often employees are expected to manually submit a physical expense report using a templated word doc with stapled receipts.
A mobile solution can help simplify your business where ever your employees are:
- Capture employee spend data
- Automate expense reports
- Access more on the road
- Increase reimbursement speed
SAP Concur: The Solution to Employee Spend Challenges
SAP Concur offers a connected, automated travel and expense management solution designed to help you overcome your most pressing employee-initiated spending challenges.
Want to learn more about how to overcome spend management challenges? Download our eBook or find your solution here on our Financial Services solutions web page.