Heavy regulation, heightened risk management and staffing shortcomings are among the unique challenges firms operating in the financial services industry face. Read on to learn how a capable expense management solution can help financial services companies transform sector-specific challenges into competitive advantages.
Handling heavy regulation
The financial services industry is one of the most heavily regulated industries across the globe. Persistent regulatory change is the reality for leaders who must ensure their companies are operating within dynamic governing guidelines at all times. Failure to play within the rules (whether intentional or accidental) can result in hefty fines and intensified scrutiny, which also costs firms substantially from a resources standpoint. Many financial services companies simply do not have the operating margin or the resources to play “catch up” with regulatory mismanagement.
These new regulatory and reporting burdens are prompting financial services companies to adopt an institutional structure that emphasizes procedures and controls. As companies struggle to increase profits – for a typical small bank, roughly a quarter of the operating expenses are allocated to government regulation – more companies are prioritizing expense management visibility and efficiency as a means of controlling costs.
A cloud-based expense management solution allows financial services leaders to gain real-time visibility into budgets and spend figures. Leaders can also proactively control costs by building expense policy rules into the solution. When the policy itself becomes mobile, employees gain real-time policy feedback, out-of-policy spend is prevented, expense-related workflow is accelerated and the administrative load required to manage it all is lessened dramatically. And with regulation as heavy as it is, financial services firms can ill-afford inaccurate data caused by lackluster workflow capabilities.
Responding to risk management
With heavy regulation comes a significant focus on data integrity, internal auditing capabilities and transparency. Financial services firms mitigate risk daily, so it’s understandable why these companies are risk-averse themselves. When it comes to evaluating technology solutions, “Is it secure?” is often the question that must be answered satisfactorily before decision makers are even willing to explore other features and potential benefits.
A cloud-based expense management solution allows for enhanced risk management, governance and internal audit functions that make it possible for firms to keep pace with the complexities and velocity of changes in the industry. Mobile expense management is a must for most financial services companies because it helps to ensure real-time data accuracy and insights, while also accounting for regional data sovereignty concerns. But the key will always be security. A capable expense management solution can address system issues, data issues, and can protect against security and cyber risks.
Solving staffing challenges
The financial services industry is facing a looming talent problem because it competes for the same talent as the attractive information businesses headquartered in the Silicon Valley. These businesses are lightly regulated, dynamic and are considered “cool." Previously, half of CEOs reported an inability to find talent with the right skills and view the issue as a serious threat to their company’s growth. Now that hiring plans are the highest they’ve been in five years, finding capable talent will continue to pose a challenge Talent shortages are causing many financial services firms to “over invest” in their employee base.
In today’s work environment, mobility affects employee satisfaction. Employees of all ages want a more connected experience – they want to work in an environment where they can freely use mobile devices to increase productivity. Cisco reports that millennials will not work at companies that block these tools, or does not allow them to choose between mobile devices.
To remain competitive on the talent front, the financial services industry must focus on making employees’ mobile work lives easier. Mobile T&E solutions that improve workflow capabilities and include features such as gamification are attractive to today’s employees. Yes, the financial services industry is heavily regulated, but it is possible for companies to mitigate mobile and BYOD risks. If financial services firms remain strict on employee access to data and device management, they will continue to risk losing out on top talent.
While compliance, risk management and staffing will continue to challenge firms operating in the financial services sector, a capable expense management solution can help companies conquer the complexities so that company leaders and employees alike can focus on driving revenue.