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The complexities of the financial services sector contribute to it being more vulnerable to challenge and change than most other sectors. For that reason, implementing a cutting-edge ERP solution that will deliver the requisite control, automation and visibility will ensure that businesses are able to navigate this sector’s difficulties.

There are many different companies that need financial services ERP such as banking institutions, credit unions, loan brokers and insurance companies. These financial sectors need heavy accounting functions and the ability to comply with industry regulations and audits.

What makes Financial Service ERP so unique and helpful?

Financial services ERP works differently than many other ERP systems. It has a more robust accounting system and gives complete insight into your customer’s financials and the businesses financials, while also complying with industry regulations.

It is a versatile, dynamic ERP solution that is designed to support businesses, giving them exceptional control over their financial and business data, whilst providing the perfect base to scale up with increased functionality and complexity when the time is right.

Compliance

When it comes to the financial sector, complying with regulations is extremely important. Customer data needs to stay on lockdown and there are tons of industry regulations that you need to be in line with, such as the legislative requirements of Sarbanes-Oxley. Instead of manually trying to keep track of everything, financial service ERP can automate these processes, especially when it comes to auditing so that accountants aren’t scrambling to find the data.

Strong Accounting Functions

Businesses within the financial service sector need stronger accounting functions than businesses in other fields. Financial services ERP offers multi-currency functions, multiple books, advanced allocations, financial planning, built-in security, rebates, taxes, asset management, and many other features. While other systems have the basics, financial services ERP covers every accounting function needed.

Visibility

When focusing on how to handle a customer’s money, transparency is key. Businesses need to be able to enforce and ensure that every employee in the is following company-wide standards. By having this type of visibility, it can increase customer loyalty because customers feel safe when businesses are able to respond efficiently.

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To keep the frantic pace of digital technology you need greater information sharing and effective communication within your business. You also need to integrate increasingly complex day-to-day processes if your business is seeking fast growth.

Here of some of the most pressing challenges facing the financial services industry today and an innovative ERP business solution can address them.

Regulatory Compliance

As the financial services industry is facing technological disruption, regulators have begun placing greater control and changing requirements in order to keep up.

In the digital era, protecting customer data, especially financial information is a growing concern for all businesses and regulators. There are new and changing regulations around data privacy that need to be integrated into your daily processes.

An effective ERP system helps your business adapt to any new regulatory requirements with ease. It makes use of powerful automation to help your business handle new, revised, and complex governmental regulations. Audits become simpler with an ERP as the essential data is stored in one central location that is easy to access and sort.

Big Data

Big data provides both opportunities and obstacles for financial service providers. Tapping into big data can help your business better serve your customers. However, sorting through unstructured data to find useful information is a tedious and costly task.

Fortunately, ERP systems capture all data in a meaningful way onto one centralised platform so your business can better utilise the information you have. Powerful data analytics technology in ERP has the potential to transform your business.

Organisational Visibility

Business owners need organisation-wide visibility to ensure customer and employee retention.  accurate and real-time visibility of your business processes.  more informed strategic decisions based on data you can be sure is up to date and accurate.

More than this, by allowing users to access and store information in one location, you no longer have to worry about files being lost or your important, sensitive information being stored on various computers

Reporting and planning

Along with improved visibility, better insight is a major advantage of ERP. The right ERP solution provides your business with a single, unified reporting system for every process. This software gives you the ability to analyse and compare functions across departments, without the hassle of multiple spreadsheets and emails. Real-time functionality means that data is always up-to-date and accurate. An ERP system can help your business gain a deeper level of analytical insight into your operations so you can address any challenges head-on.

Customer Demands

As a financial service provider, your main focus is handling customer’s money and your customers have higher expectations than ever before.  This is especially true when it comes to ease-of-use across all touchpoints, and how their data is used and how well it’s protected. Transparency is key to your service offerings. Your business needs to be certain that companywide standards are being enforced.

All client information is centralised and streamlined, so that your sales team can focus on building and maintaining customer relationships instead of maintaining spreadsheets. The real-time nature of ERP allows your organisation to respond efficiently to your customer demands.

Data Security and Quality

One of the biggest advantages of an ERP system is data security. Sharing data across functional silos such as customer service, sales, marketing and business development enhances is simple with one centralised platform. What drives ERP data security is that it provides a single input system solution that has intrinsic controls to ensure the security of data.

Further, by automating the daily business activities of your company into a single repository of information helps improve the accuracy, consistency and security of your company’s data. This means that your data is much more significant and can drive business strategy, development and growth.

With the help of ERP system in your business you are able to:

• Improve business performance
• Facilitate procure-to-pay and order-to-cash processes
• Cut out all possible errors and streamline financial procedures
• Certify financial reporting and adherence to comprehensive, controllable accounting
• Spend less time on data consolidation and more time on data analysis
• Gain strong fiscal control

The use of ERP software in the financial industry guarantees the reliability and overall security of the accounting information, provides support for decision-making and shows real-time data. To meet the challenges of a competitive and unpredictable market, businesses need to implement a strong ERP business solution.

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Blockchain and Cryptocurrency

Just a few years ago, cryptocurrency seemed like a phase but blockchain and cryptocurrency are here to stay!

An initial public statement on crypto assets was issued by South African authorities in 2014. However, due to the growing interest and rapid innovation in the financial technology The Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), South African Revenue Service (SARS) and the South African Reserve Bank (SARB) as part of the Intergovernmental Fintech Working Group (IFWG) released a consultation paper on crypto assets at the beginning of 2019. It highlighted the benefits and risks of the related activities, reviews the approaches by other jurisdictions, and presents recommendations for dealing with crypto assets from a South African perspective.

As regulators get more involved in the industry, we can expect greater use cases of this technology. Some areas where increased activity can be anticipated are peer-to-peer lending and micro-insurance.

Interestingly enough, the technology behind cryptocurrencies – blockchain – will prove to be highly valuable security feature within the financial services sector. We can expect it to be increasingly adopted in areas where valuable information is being exchanged like digital payments, escrow services, and loan processing.

Mobile Mobile Mobile

The mobile trend shows no signs of slowing down. Everything in the financial services sector is going mobile. In the current digital economy, it is essential to optimise your processes and customers services for mobile. Most of us are already able to make payments, deposit and transfer funds, and apply for loans from the convenience of our phones. So the competition is to create a mobile app that is the simplest and easiest to use.

Interestingly, the move towards the mobile is also touching third-party financial service providers who are now competing with banks in the financial space. Third parties like unconventional lenders, financial managers, or simple financial budgeting apps. Traditional industry leaders need to consider how they integrate with these third-party services and which of the services they may be able to offer to their customers directly.

The focus for the financial industry is increasingly customer-centric services from 24/7 access, easy-to-use apps, or a new focus on mobile pay. Digital, specifically mobile, payments are set to be the new normal.

Regulatory requirements

The Intergovernmental Fintech Working Group (IFWG) is expected to publish an updated regulatory framework for the fintech industry in the coming months to gauge the need for regulatory sandboxes. This is an encouraging trend for the industry trying to navigate the muddy waters of regulation in South Africa.

Regulatory sandboxes are frameworks set up by the regulators that allow innovators and industry leaders to conduct live experiments like testing new business models and technologies, in a controlled environment under the supervision of the regulator. This means the industry can get regulatory relief and support to navigate the constantly changing regulatory requirements. Sandboxes are also beneficial for the regulators in gaining greater visibility as to customer experiences and the most suitable regulations to implement guided by hard data.

Big Data

In the gig economy, data is everything. The trend here is machine learning. Businesses increasingly need to make use of automation tools like cloud-based ERP systems, to quickly and accurately process data. To keep pace with the current regulatory and digital requirements, the financial services industry needs to extract optimal value from their data in order to better serve customers, save money, save time, and even make money more efficiently.

Financial institutions and service providers need to capitalise on the digital transformation trends to be successful and compete in the current environment. Businesses that remain stagnant and attached to traditional systems and ways of thinking are sure to fail. Successful financial services professionals are prioritising data and the insights they can gain from organised and accessible data. Further, the digital focus on cryptocurrency and mobile integration is the new normal and will increasingly be a point of competition between businesses.

Find out how to take advantage of these trends and more to catapult your financial services business into the future.

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