Financial services companies are seeing annual losses worth £10m due to inefficiencies caused by manual processing of contracts, with 13% spending 200 hours every month on processing, according to research.

The survey, which included 100 finance professionals, including managers and above, was commissioned by digital consultancy company 4C, and found that the lack of automation is resulting in wasted resources.

On average, financial services companies spend 78 hours every month on processing agreements, and 31% of financial companies lose £1m or more every year. Only 11% have a fully automated process for managing agreements, and only one in twenty agreements have access restricted to the named owners.

Most of the companies (93%) have seen non-automation lead to issues, with 7% suffering financial losses as a result. These issues included human errors, such as incorrect document disposal (56%) and time delays to projects (49%).

Furthermore, 47% have seen losses as a result of manual processes and 43% have seen agreement crossover, with people signing different versions of the same document.

Just over a quarter have suffered non-compliance (30%) or other legal issues (25%), while 39 per cent of the surveyed admitted to having unintentionally allowed an agreement or contract to expire.

Commenting on the research, Jani Van Hecke, head of contract lifecycle management practice at 4C said: “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. This research highlights the true scale of the problem that outdated processes create and serves as a wakeup call to the industry.”

Gareth Stephens, UK CEO at 4C

Gareth Stephens, UK CEO at 4C

In the survey, 61% said they see full digitisation and automation as very important, but amongst the companies which have not yet fully digitised, cost (47%), data security concerns (42%) and company culture (39%) are the key barriers.

However, companies are also seeing the benefits, naming data safety, higher employee productivity and improved customer experience as positive sides, as well as greater compliance and environmental impact.

Gareth Stephens, UK CEO at 4C, said: “It’s encouraging to see that financial services companies recognise digitisation and automation of their manual agreement processes is so important to their business.

“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. By shifting company culture to make agreement automation a priority financial services companies can protect their data and drive business growth.”

Sunniva Kolostyak
by Sunniva Kolostyak
FinTech Reporter at IBS Intelligence
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