Finance firms, like many other firms, are increasingly using automation tools and programs to increase the speed and accuracy of their work processes. The reason why automation is so attractive is it helps employees to complete repetitive procedures more efficiently and to simplify complicated tasks. It also helps to increase accuracy and safety measures while minimizing human error.
Here are five areas in which automation is disrupting the finance industry (along with some of the fintech firms that are driving this change—all of which are hiring).
1. Human Resource Management
This used to be one of the least automated components in finance, but now software firms like Workday and 15Five are building platforms to assist with and support employee management. Finance companies, like other firms, are increasingly recognizing that their people are their most valuable resource and need to be managed more thoughtfully and efficiently.
Finance companies now consider mobile-oriented tech as part of the core workflow. The industry relies heavily on its ability to get work done efficiently. Fintech continues to utilize software that speeds up communication and productivity, and while mobile used to be considered a security risk by the financial industry, it’s now considered a way to enhance productivity and provide more flexible workflow for employees.
3. Customer Support
More automation is taking over customer service. This support has advanced tremendously with certain software programs that include internal systems to support customers. Software systems such as Fresh Desk and Zendesk are cutting down on the headcount needed for customer service departments in some finance companies. But more important, these new systems are improving the customer experience and the lives of the people working in those departments.
Payments systems like Stripe, invoicing and billing systems like Freshbooks, and more advanced ERP systems like NetSuite are examples of programs that continue to reinvent the way fintech is automating finance firms’ functions. Although many companies are still at least partially stuck in the past of creating manual invoices and payments, these automated systems are increasingly taking over. Both the customer and the vendor win with greater automation in this area. Vendors cut costs and get paid faster. Customers benefit from this greater efficiency of vendors with lower prices or higher value delivered for their purchases.
Xendoo, Zoho, Quicken online, and other systems are automating the accounting, bookkeeping, and tax filing functions of many businesses, including finance firms. Traditional accounting software and human bookkeepers and accountants still have important roles to play in this area, but the accounting business is rapidly changing due to automation. The number of people involved with traditional activities is likely to shrink dramatically as automation takes over more of these functions. Ultimately, businesses and their customers will benefit from lower operating costs that allow for better value to be delivered rather than spent on administrative functions like accounting.
A final note
Automation is impacting finance employees in a variety of complex ways. This means it’s critical for employees to have a greater understanding of and train on different software systems to ensure they keep up with the new technology and benefit from it rather than viewing it as a potential threat to their jobs.
Christopher Grey is the co-founder and COO of CapLinked, an enterprise software company offering an information control and risk mitigation platform for the sharing of confidential or sensitive documents and communications outside of the enterprise. Previously, he was a senior executive and managing partner in private equity and corporate finance for 15 years, and directly involved in the deployment and management of billions of dollars of debt and equity investments in various industries.
Yesterday, Anthony Noto announced that he was stepping down as Twitter COO to become the CEO of fintech startup Social Finance (often referred to as SoFi). SoFi, which began in 2011 as a student loan refinancing company and has since also become a mortgage lender and hedge fund investor, has had some trouble as of late.
As we reviewed earlier, many attorneys are behind technologically and reticent to adopt new tech tools, despite (1) ABA recommendations to stay abreast of relevant technology, (2) sophisticated clients who expect tech proficiency in their attorneys, and (3) competitors like alternative legal service providers (ALSPs) using technology to provide legal support work at lower costs. The bottom line is that law firms and lawyers need to keep current with technology because being deficient means losing business—or going out of business.