Financial technology has evolved at a remarkable rate since the advent of the internet. Digital software is now at the core of financial transactions made every day across the globe, and its many uses and benefits have transformed how enterprises both large and small operate.
SMEs can now compete with the best
The increased accessibility of digital software has provided immediate and tangible gains for SMEs as it has effectively levelled the playing field. They are now able to leverage tools that were previously the domain of only the largest corporations. Every business is now capable of accessing superfast internet connections, always-on mobile devices, and big data computing, and can buy into feature-rich software suites and services that can streamline and optimize every aspect of their core financial processes, from payroll and accounting to portfolio management.
Cloud accounting tools
Setting up a traditional accounting system is generally a laborious process requiring significant resources for infrastructure maintenance and upgrades, in addition to careful management of licensing and accessibility for remote users. In contrast, for a simple subscription fee, an enterprise can now access cloud financial software and other diverse digital tools that are simple to set up and can be accessed securely from a near limitless amount of connected devices these can vary from invoice templates for payments to expense tracking software for financial management. The Software-as-a-Service license also ensures that upgrades and maintenance are taken care of by the vendor, while online services are flexible and can be scaled to demands, depending on a customer’s needs and objectives. Streamlining IT in this manner is advantageous for the whole business as resources can be diverted towards other projects.
Asset management software
Asset management is another case study for the transformative effect that software platforms have had on the financial sector during the last decade. Broadly defined as a system that monitors and maintains an enterprise’s assets through the process of deploying, operating, maintaining, and discarding them effectively, asset management is now very much the domain of digital solutions. This has been driven by the inability of manual methods and Excel sheets to cope with increasing business volumes and cater towards the growing diversity of investor portfolios and complex transactions.
The latest asset management software solutions offer a 360-degree view of investments with multi-asset class support, real-time transaction processing, and an extensive “back office” functionality to optimize cash flow. Increasing computer power and the growing mass of big data is also allowing enterprises to use software to get relevant performance reports, analysis metrics to inform decision-making, and to conduct complex calculations to determine risk exposure. Business leaders and employees can also get an overview of portfolio investments and other important data via web and mobile modules.
Financial teams can now inform strategy
Evolving financial tech is also empowering financial teams to be the key drivers of improvement initiatives across a business and to have a greater input into the wider enterprise strategy. Software has effectively transformed the corporate financial officer role as their teams now have access to high-quality systems and processes to improve efficiency and accuracy of core activities. The strategic use of digital tools can, for example, improve long-term planning and flexibility, reduce financial risks, streamline processes, and ensure compliance with increasingly stringent regulations.
“Finance is in a unique position within the company, with access to all of its financial and much of its operational data,” Hackett Group Principal and Finance Advisory Practice Leader Jim O’Connor says. “By better integrating this data through Enterprise Performance Management and business intelligence systems, finance can help companies understand performance, improve forecasts, and take action to close gaps and take advantage of opportunities.”
Advanced payroll systems
Financial software will continue to evolve during the next decade as artificial intelligence and robotic process automation transform the manner in which certain tasks are completed. Advanced payroll systems are already keeping track of an organization’s workforce by cataloguing and updating work hours and calculating salaries and tax deductions, but the use of robotics is set to automate or eliminate around 40 percent of transaction accounting by the end of the decade.
Research by Accenture suggests that financial staff will soon be able to spend 75 percent of their time on tasks that are more closely tied into an enterprise’s bottom line, such as predictive analytics, performance management, and decision-making. Advanced systems will also require less resources and management as changes to tax laws, for example, will updated automatically, which will simplify human resources functions even further. The benefits for those that embrace digital transformation initiatives is simply staggering, and these agile and connected enterprises will be in the best place to integrate and leverage newer forms of software as the digital landscape evolves and matures further in the coming years.
