5 Core Benefits of Automation for Financial Institutions & Compliance

Team FOCAL
November 22, 2023

In the fast-paced world of financial services, time is incredibly valuable. Finance and Risk and Compliance teams have a variety of tasks to manage, including generating accurate and timely reporting, data analysis, cash flow management, and more. When the stakes are high, so is the pressure and the teams closest to the money are what keeps the inner-workings of an organization ticking.

But that's not all - outside their organizations, Finance and Risk and Compliance teams also have to monitor and navigate an ever-changing regulatory environment and heightened scrutiny from governing bodies. This is particularly true for businesses operating in the Middle East and North Africa (MENA) region, where financial risk and compliance are increasingly essential aspects of operations.

As MENA's financial institutions embrace the future, their professionals are also being empowered to act as strategic business partners, delivering advanced analytics to companies. However, with rapidly evolving technology landscapes, achieving a future-ready finance function can seem like a steep hill to climb. To make this a reality, finance professionals must navigate the changing nature of their work, address efficiency gaps in their process, and develop a workplace that accommodates changes that can empower their team.

By leveraging the power of automation, Risk and Compliance teams can free up time to add more value to their organizations, enabling them to be more strategic, proactive and successfully navigate the challenges of financial risk and compliance.

Why Automation?

A recent study conducted by The Economist reveals that by 2035, the MENA economy could experience a remarkable $320 billion1 increase through AI adoption. The report emphasizes that the primary source of growth will stem from cost savings realized through automation and the enhancement of products and services across several sectors, including finance2

Automation for Financial Institutions and Risk & Compliance teams effectively describes training software to ingest data, analyze it and make a decision about what happens next in a fraction of the time it would take a human. This principle can be harnessed to perform the most basic and monotonous of tasks - e.g. filling out blank client communications templates with specifics. This becomes much more exciting when considering more complex and challenging applications, such as carefully analyzing hundreds of records to ensure they all comply with a specific set of rules that do not break a certain risk threshold. Something that might have previously taken a Compliance professional hours (or even days) to process and make a decision on can now be turned around in moments before being checked if necessary by the same human.

Whether automating repetitive and time-consuming tasks or making sure that the company is following rules and regulations as required by law, Risk and Compliance teams can save time and reduce errors, enabling them to focus on more strategic and value-adding activities. 

There are many technologies that make automation possible for financial institutions and risk & compliance teams. Some of these technologies include:

  • Robotic Process Automation (RPA), which uses software robots to automate repetitive tasks.
  • Artificial Intelligence (AI) and Machine Learning (ML), which enable computers to learn from data and make decisions.
  • Natural Language Processing (NLP), which allows computers to understand and interpret human language.
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What are the Benefits of Automation in Financial Services?

Automation of manual processes can play a critical role in mitigating financial risk and ensuring compliance with regulations. Here are five key benefits of automation for financial organizations and risk & compliance teams:

1. Cost Saving

While compliance is critical in the financial services industry, it can also be costly. By automating manual compliance tasks, financial organizations can reduce the risk of errors and avoid fines and penalties, ultimately improving their bottom line. 

2. Time Saving

By automating manual processes, financial organizations can achieve greater efficiency and save valuable time. Automating tasks such as data entry, report generation, and account reconciliation can free up hours of time each week, allowing Risk and Compliance teams to focus on more strategic activities. The reduction in man-hours spent can also lead to significant cost savings, which can be reinvested in the business to drive innovation and growth. 

3. Enhanced Accuracy

Manual processes are often prone to errors, which can have serious consequences in financial services. Automation can enhance accuracy in financial organizations and risk & compliance teams by reducing the risk of errors and increasing the accuracy of data collection and analysis.. 

4. Enhancing Compliance

Financial Services is a highly regulated industry, and compliance is essential. By automating compliance-related tasks, such as KYC (Know Your Customer) and AML (Anti-Money Laundering) checks, teams can ensure that they are meeting regulatory requirements at all times. Automation can help financial organizations and risk & compliance teams enhance compliance by being configured to ensure routine compliance tasks and regulatory requirements are met immediately, reducing the risk of non-compliance. This improves the speed and robustness of compliance reporting and reduces the risk of penalties and reputational damage.

5.  Improved customer experience

Automation can help financial institutions streamline many of their processes, reducing the risk of errors and improving operational efficiency which has obvious, direct and impactful benefits. One that many overlook is the increased positive experience of the organization’s customers. With analysis and decision making  sped up for your team, your customers are able to get what they want faster as well as being protected from risk more effectively

IDC research3 reveals that the financial sector in the MENA region presents the greatest AI adoption potential, with an estimated $28.3 million or 25% of the projected AI investment for 2021 allocated for AI solution development. Public services (education and healthcare) and the manufacturing sector follow closely behind. 

The future of financial risk and compliance in MENA is tied to automation and innovation. By adopting new technology-driven approaches, financial institutions and risk & compliance teams can stay ahead of the curve and navigate the complexities of the regulatory landscape. 

Ready to reduce risk and enjoy the benefits of automation? Book a demo with us today.

REFERENCES:

  1. https://aibusiness.com/verticals/ai-to-contribute-320-billion-to-mena-region-by-2030 
  2. https://www.arabianbusiness.com/industries/technology/how-artificial-intelligence-will-add-320bn-to-the-mena-economy-by-2030-google-report 
  3. https://www.pwc.com/m1/en/publications/potential-impact-artificial-intelligence-middle-east.html 
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