Prevailing economic uncertainty is having a significant impact on financial institutions. Banks and credit unions are recalibrating their priorities and budgets, with a focus on growth, efficiency and talent retention. The key to achieving these objectives lies in digital transformation.
With increasing demands from regulators coupled with a heightened need for governance, the finance departments of banks and credit unions are under considerable strain. However, digital tools can automate routine tasks, thereby enabling employees to manage larger workloads.
Below are just a few of the ways financial institutions are using technology to address industry trends.
Talent Retention and Recruiting
Technology not only aids in retaining employees but also plays a crucial role in attracting top-tier talent. As financial institutions look to fill the void left by retiring staff with new hires, the younger workforce is likely to expect digitized tools and paperless processes.
Automation helps financial organizations digitize processes and enhance efficiency. In AvidXchange’s 2023 AP Career Satisfaction Survey, conducted in collaboration with the Institute of Finance & Management (IOFM), we found that employees working in automated accounts payable (AP) departments demonstrated higher job satisfaction and felt more connected to their organization’s mission.
Compliance
The banking sector is continually subjected to a broad spectrum of ever-changing regulations. As the macroeconomic landscape shifts, the policies governing the financial services industry must adapt accordingly.
Many banks and credit unions are implementing data and reporting technologies to ensure regulatory compliance and avert potential penalties and legal actions. Automation offers an efficient, dependable and scalable solution for identifying and addressing any anomalies or issues in an organization’s compliance operations.
Digital Banking
There’s a growing trend of consumers opting for online banking. A study on digital banking by Forbes disclosed that 78% of Americans favor banking through a mobile app or website. Furthermore, Consumer Reports discovered that 64% of Americans have utilized a peer-to-peer payment app for money transfers.
To meet demand, banks and credit unions are seeking additional ways to engage with customers digitally, streamlining processes for employees and improving customer experience.
Tech Forecast for Financial Services
Technology plays a crucial role in the banking sector and credit unions by fostering innovation, improving operational efficiency, ensuring regulatory compliance and enhancing customer service.
As financial leaders plan for 2024, many are focused on digitization to drive organizational growth. By leveraging automation technology and advanced analytics, financial services companies can streamline operations, enhance decision-making, optimize resource allocation and reduce costs.
In September 2023, AvidXchange conducted a survey of 500 financial leaders to learn about their concerns and priorities for 2024. We found that technology is at the forefront as businesses plan for a new year.
To read more about our survey and the insights we uncovered, download our free whitepaper, “5 Business Trends Shaping Financial Services in 2024.”
