Payments Firms Remain Heavily Reliant on Manual Tasks

Research from AutoRek reveals the problems facing payments firms as well as their perceptions on regulation, compliance and payments reconciliation

An overwhelming majority of payments firms are continuing to perform manual tasks when carrying out the reconciliation control process, while a similar proportion are concerned over the transparency and standardisation of their data.

That’s according to fresh research published by AutoRek, which reveals the problems currently facing payments firms as well as their perceptions on regulation, compliance and payments reconciliation. 

The leading software provider to companies in the global financial services sector discovered 84% of companies are heavily reliant on manual tasks and spreadsheets to perform the reconciliation control process, while 86% say their data lacks the transparency and standardisation required.

“In the payments industry, there is a clear trend towards streamlining operations by minimising manual processes, yet significant investments remain to be taken,” comments Nick Botha, Global Payments Lead at AutoRek.

“Our payments report supports the persistent challenge posed by legacy systems within the market, a challenge we see across firms globally.”

Firms remain reliant on spreadsheets

AutoRek’s study involved researchers speaking to more than 500 respondents working across various functions at payment organisations in the US and UK.

Its findings show that, while reconciliations are a fundamental control mechanism for finance and accounting, many firms across the financial services sector continue to rely on Excel spreadsheets to carry out this crucial process. 

This is an especially prevalent trend in the US, where 88% of respondents acknowledge that their company relies heavily on spreadsheets for critical financial control processes.

Many Payments Firms Continue to Rely on Excel Spreadsheets

Clearly, manual processes can lead to inefficiencies, with 69% of US firms noting that the cost of their payment operations rises in direct proportion to increased payments processing.

This is also reflected in the UK with 63% of payment firms seeing a direct correlation between back-office costs and payment volumes.

The potential of automated reconciliation

AutoRek says expansion of the digital economy, rising transaction volume and ever-changing regulatory obligations mean spreadsheets are no longer fit for purpose. 

It contends that its findings show the need for more education around reconciliation and how it can help businesses automate manual processes, thus achieving significant cost reductions and time savings. 

The research also highlights that the number of payments firms expecting their cost of compliance to increase over the next 12 months has more than doubled compared to 2023, jumping from 38% to 80%.

Some 50% of respondents said higher levels of automation would allow them to save time and support growth objectives. A similar percentage said it would support their growth objectives, while 45% said it would cut operational costs.

“In recent years, there has been growing recognition of the requirement for businesses to streamline their operational frameworks to effectively navigate potential disruptions,” adds Botha.

“However, companies need to also ensure they maximise the profitability of their business, especially in today’s increasingly fast-paced and competitive environment.”

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