Underinvested and overlooked: Unlocking the true value of back-office processes with AI
Back-office operations are underinvested and overlooked, with companies in the financial services sector favouring and pouring their investments into front-end, customer-facing initiatives instead. In doing so, these companies have neglected to optimise the crucial behind-the-scenes operations. While often left unnoticed, back-office functions are foundational to a company's internal operations, allowing front-office teams to focus on value-added tasks and strategic initiatives.
In fact, the back-office holds one of the keys to driving innovation, value creation and business growth. So how can businesses get their back-office up to speed and ensure they support both the short-term and long-term business goals?
Unlocking the true value of the back-office process
According to Gartner, technology remains at the top of the list for increased budgets, as 82% of CFOs had planned to allocate more spending in 2024 than the previous year. Now is the time for the finance back-office to embrace automation and artificial intelligence (AI), understand how to best streamline processes and use technological innovation to boost operational efficiency.
With financial services exposed to growing volumes of data, traditional, manual processes such as spreadsheets are simply no longer scalable as they cannot accommodate organisational growth. Automation is a transformative solution that reduces firms' reliance on manual intervention, providing more opportunities to streamline operational procedures whilst also saving time and freeing up resources. By optimising these back-office operations, businesses can instead focus on core objectives and value-adding tasks. In addition, this enables firms to allocate more time to building relationships with customers and clients.
Additionally, AI can further elevate back-office processes through the use of data-driven and adaptive tools. These capabilities range from making data-driven decisions to handling complex tasks that are typically time-consuming for finance teams. In doing so, firms can have access to real-time data, increasing the accuracy of reporting. This mitigates the risk of incurring unnecessary penalties and having to allocate more resources to satisfy auditors, regulators and busy period-end reporting.
A comprehensive review of the operational landscape
When exploring how to enhance back-office processes, firms should first perform a comprehensive review of the operational landscape. This assessment will allow companies to review all operational processes, determining where reliance is placed most on manual input. With a full understanding of all current manual processes, priority can then be placed on replacing these manual tasks with automated tools and AI solutions to drive the greatest impact. Crucially, any decision to invest in automation should align with a long-term strategy to leverage data and technology across the organisation.
Creating a phased and strategic plan will ensure firms can plan accordingly, prioritise competing demands and meet the ultimate goal of complete automation. With an approach like this, firms can then consider the current challenges and balance immediate needs with long-term objectives to drive the utmost operational efficiency.
Preparation is key to a successful back-office process
Once a plan is put in place, the next step is for firms to thoroughly prepare for the successful implementation of an efficient back-office. While there can be an urgency to see quick results like improving control and removing manual tasks, taking the time to prepare properly is essential in unlocking the most value out of the process. Effective preparation involves the following:
- Understanding the process - a clear and detailed understanding of the specific business process is key – an example of this includes knowing how long tasks take to execute. This knowledge helps build a vision for how the use of automation or technological advancements like AI could bring further value and align with business goals.
- Defining objectives - clearly defined objectives are essential for determining how back-office automation can help firms accomplish goals such as real-time payments. Detailed requirements such as performance metrics and desired results can then be captured to provide crucial visibility into the implementation of automation and AI solutions.
- Clarifying data needs – firms must be clear and validate the type of data they use and ensure it can be obtained reliably from source systems, including internal and third-party data. Validating and identifying gaps at an early stage allows for any additional changes needed before proceeding. In doing so, firms can ensure the optimal function of AI and the successful implementation of automation – both of which rely on access to data.
By taking this meticulous approach, firms can feel confident that they have a strong understanding of their path to an efficient back-office, which is crucial for delivering targets and assessing implementation success.
Aligning with long-term business goals and supporting overall efficiency
While back-office operations have typically been underinvested and overlooked, we can expect to see AI tools being implemented to align with long-term business goals and support the overall efficiency of processes. The road to implementing efficient automation must be strategic and in return these technologies will unlock significant value for the business moving forward. Firms that fail to unlock the true value of their back-office are at risk of getting left behind in the rapidly evolving technological landscape.
