Corporate banking is still facing problems that were solved in personal banking years ago. Built on a culture of in-person relationships and legacy systems (and with technological innovations few and far between), corporate banking is outdated and in need of a drastic overhaul.
But until HSBC, Goldman Sachs, and Deutsche Bank can catch up with Revolut, N26, and Starling – we need to be realistic about how to solve those problems.
The root cause: lack of bank connectivity
Finance teams rely on Enterprise Resource Planning (ERP) systems to manage their financial data – like supplier payments, payroll, and one-off expenses. But whilst these systems are adept at storing data and providing insights, they lack interoperability with banks.
As a result, you’re spending valuable time and resources on manual, repetitive tasks which are inefficient, time-consuming, and unnecessarily risky.
Without connectivity between your ERP and your bank, there’s no getting around having to manually log into your bank portals to make payments and get statements.
When you make payments manually, by uploading payments files, you’ll often find that your ERP produces payment files that aren’t compatible with your bank’s portal. That means submitting payments directly, sometimes line by line – a problem compounded if you use multiple accounts. You shouldn’t be spending hours a day submitting payments manually.
When you get statements manually, by logging into and downloading from your bank portal, you’ll often need to collate that data into a spreadsheet or transform it into an ERP-readable format. Then you need to compare your transaction data with your accounting system to check for discrepancies.
Various studies report that nearly 9 out of 10 spreadsheets (that’s 88%) contain errors.
Both of these processes invite six big challenges into your finance department:
1. Inefficiency
Switching between systems, re-entering information, and manipulating the data becomes a big part of your day and has nothing to do with your skill as a finance professional. It is, for all intents and purposes, a waste of your time.
2. Errors
It’s only natural that you’ll need to use workarounds like manual compilation of data in spreadsheets, but once this data comes out of your system it becomes at high risk of error.
Typos, duplicate entries, and miscalculations are almost inevitable – but can lead to expensive mistakes like late payments fees, incorrect payments that can’t be recovered, overdraft fees, and inaccurate financial reporting.
Manual processes exacerbate the risk of loss, compliance breaches, and reputational damage.
3. Control & non-compliance
Bank portals are typically designed for basic banking needs, not the kind of comprehensive, secure financial management that businesses need. If multiple people have access to an account, it’s impossible to control who’s making payments or downloading statements, and there are no approval workflows to restrict access.
In regulated industries like Financial Services, this means no auditor confidence that you’re providing secure and trustworthy financial data.
There’s a reason why your auditors put emphasis on automated payment controls – which enable traceability, transparency, and the ability to quickly produce records to validate transactions and activities.
The PRA (Prudential Regulation Authority) and FCA (Financial Conduct Authority) require regulated firms to demonstrate operational resilience by 2025. Both of these regulators consider activities carried out by people (i.e manually) to be high risk.
For corporates, new governance regulations like UK SOx are quickly making automated processes just as necessary as they are for FinServs. Finance teams in large companies will need to show robust systems and controls that use tech and automation to detect and prevent key risks.
Finance leaders will need to personally vouch for the accuracy of financial statements and ensure that the controls and processes behind them have been thoroughly reviewed. Failure to comply will incur significant fines and potentially prosecution.
4. Risk of internal fraud
Just like with error, there’s a greater risk of internal fraud when your processes are manual and multiple people are involved.
The more who have access to your accounts, the more chance there is that somebody will attempt to mismanage company funds.
This is particularly true when dealing with manual statement retrieval, as reconciliation is the ideal point to manipulate data.
“Manually downloaded data can be accessed and changed to hide underlying issues, including fraud, so that the company’s internal systems and the external data provided by the bank can seem to agree or reconcile. Robust and thorough reconciliation of the two systems is a key control, which should highlight unauthorised transactions. Without automation, this is simply not possible.”
Sean Moriarty, CFO at AccessPay
5. Lack of cash visibility
You can’t really trust a bank statement that has been manually downloaded, because once it’s been retrieved and reconciled, it’s already out of date. Without a real-time picture of your cash, you can’t take full advantage of opportunities or make informed, strategic decisions.
“You’re taught on day one of being an accountant that the bank statement is always the single source of truth, and you have to be able to tie in every single entry you’ve got in your accounting system to what’s on your bank statements. If there is one pence difference, it’s not good enough. Yet, if you take a standard bank statement you find that nine out of ten times the items don’t match.”
Anish Kapoor, CEO at AccessPay
6. Lack of verification checks
With financial fraud on the rise, especially impersonator and APP fraud, a key challenge of manual processes is how to thoroughly verify the recipients of your payments.
Every time a finance team manually enters payment details, the potential for error and fraudulent activity goes up.
It’s particularly challenging to confirm the legitimacy of payees for one-time or infrequent corporate payments.
You’ll often find yourself without the data to properly vet each recipient, and whilst many bank portals offer this feature, you sometimes have to create mock payments which can provoke typos or other human errors like overlooking a mismatched name or number.
Automation is the silver bullet to all six of these manual process challenges.
By utilising a platform like AccessPay to be the gateway between your business and your bank, you bypass the risks associated with each of them. Our platform uses smart rules, automation, and protection to make bring your corporate banking setup up-to-speed, up-to-date, and up-to-scratch.
To find out more about these tackling manual process problems, along with a deep dive into how else automation can protect you from fraudsters and regulators, download our new eBook
