Manual processing costs financial services £10m a year

Financial services firms are losing millions of pounds due to manual processing of agreements, according to 4C research.

The average loss is over £10 million a year, while 31 per cent of companies lose £1 million or more a year.

The digital consultancy interviewed 100 finance professionals, at manager level and above, finding that lack of automation is resulting in wasted resource. Businesses are spending an average of 78 hours per month processing agreements, with 13 per cent spending over 200 hours per month.

Jani Van Hecke, head of the contract lifecycle management practice at 4C, pointed out that businesses often neglect the non-customer-facing part of the business, “so it’s no surprise that the manual processing of agreements is resulting in lost money and time for financial services companies”.

Only 11 per cent of financial services firms have a fully automated process for managing their agreements, while just seven per cent of agreements have access restricted to the named owners.

The vast majority of financial services companies (93 per cent) have experienced issues as a result of non-automation and 47 per cent have suffered financial losses as a result.

Issues cited include human error, such as incorrect document disposal (56 per cent) and time delays to projects (49 per cent). A similar proportion (47 per cent) have suffered financial losses as a result of manual processes, while a further 43 per cent are seeing agreement crossover, with people signing different versions of the same document.

Just over a quarter have suffered non-compliance (30 per cent) or other legal issues (25 per cent). Around two in five financial services companies (39 per cent) admitted to having unintentionally allowed an agreement or contract to expire.

At the same time, 61 per cent of respondents said they see full digitisation and automation of their manual agreement processes as very important.

Half of the organisations which have not yet fully digitised cited cost (47 per cent) as a barrier to moving in this direction, while 42 per cent reported concerns around data security and 39 per cent said company culture were key barriers.

Despite these barriers, those surveyed said they could see the benefit in fully digitising their agreement processes. The key perceived benefits among those still operating at least some manual processes were data safety (39 per cent), higher employee productivity (36 per cent) and an improved customer experience (34 per cent).

Gareth Stephens, UK chief executive at 4C, added: “Cost and data security were cited as barriers to automation, yet our report shows that access to contracts is currently open within businesses and that manual processing is hurting revenues.”

    Share Story:

Recent Stories

The Future of Intelligent Finance
FStech Group Editor Mark Evans sits down with Jason Cao, President of Global Financial Services Business Unit, Enterprise BG at Huawei ahead of its Intelligent Finance Summit which was held on 3rd and 4th of June in Shanghai. This Q&A delves into key trends in digital transformation of the financial services industry as well as a look at how data, robotic infrastructure, intelligent storage and innovative technologies are shaping the future for FSIs.

The Rise of Instant Payments
Instant payments are creating new business opportunities for banks by providing more touchpoints than ever. With these evolutions underway, Featurespace brought leading industry experts together to discuss how they are protecting customers from fraudsters in real time, utilizing innovative and disruptive solutions to reduce fraud. Click here to find out more.

Offloading Cyber Risk in the Cloud
As cyber attacks and data breaches are in the news on an increasingly regular basis - with regulatory penalties and customer trust on the line for financial services firms - it has never been more crucial to be compliant in the cloud.

This video, with Akamai’s EMEA director of security technology and strategy Richard Meeus, will help explain what your company can be doing to make sure it’s not embroiled in the next big fine or front-page scandal.