Strength in Numbers

Jan  19 
Danny Baker  Vice President, Market Strategy, Financial Risk Management Solutions, Fiserv 

Why financial leaders need a stronger, more flexible foundation

Stability and flexibility don't have to be at odds. A solid financial accounting foundation can help financial institutions strategically stay the course, even if the route changes.

While 2020 was an exceptionally challenging year, financial institutions have always faced disruptions to their plans and forecasts, including branch closures, interest rate changes, mergers, shifting consumer expectations and regulatory restrictions.

Financial institutions can't accurately foresee every change, but they can rely on past performance data to model and plan for potential outcomes. Robust, integrated accounting technology can help institutions better respond to sudden changes and emerging market trends with comprehensive, accurate and accessible data.

For example, online shopping increased in 2020, but the long-term effects on retail stores and credit card portfolios is yet to be determined. Other changes are also in flux, including how the increase in remote work will shape commercial real estate.

Understanding how trends affect the business can help financial leaders respond effectively. They need the ability to reach strategic conclusions accurately, quickly and sometimes proactively.

Leaders can't design good, strategic responses with bad information. Clarity from past performance often reliably predicts future outcomes.  

Financial institutions can't accurately foresee every change, but they can rely on past performance data to model and plan for potential outcomes.

Finding Resiliency Amid Dynamic Change

As market forces and economics change, there is increasing pressure on strategic processes to drive growth, facilitate agility and ensure resiliency. To succeed in this environment, financial institutions need to leverage strategic planning processes that prioritize key objectives with quantifiable measurements.

Real-time information from internal and external sources, combined with historical knowledge, enables financial institutions to rapidly adjust plans and support or automate decisions that improve customer, employee and partner interactions.

Financial institutions need the right tools to gain insights from their data. By integrating the financial applications that feed into the big picture, finance departments can create a comprehensive view of financial performance. Common workflows and financial processes can be automated, too. And preset workflows enable strict enforcement of compliance measures without slowing down critical processes.

By streamlining and automating processes, staff can spend their energy applying insights instead of collecting and managing data. The benefits accumulate, becoming a foundation for greater effectiveness, resiliency and compliance.

Better Data Can Lead to Increased Growth

A good financial accounting reporting system can help organizations evaluate strategies, such as adding a new business line or pursuing an acquisition. For example, leaders can load target financial data into their accounting system during the mergers and acquisition evaluation process to see what a combined organization would look like. Leaders can see and tweak outcomes before they sign a deal.

Integrated accounting systems can create a smoother transition after change occurs, too. Core conversions can take years, but financial data must be reported from deal closure after a merger or acquisition. An integrated accounting system uses data from numerous sources to create a single financial truth for the organization at any time.

Smaller strategies also can have bottom-line effects. Modeling helps financial leaders decide which tactics are worth the investment and whether they're meeting expectations.

Performance Is Key for Decision Making

Any changes in the business should be mirrored in the reporting. An integrated accounting system makes it easy to dig into actuals by product line, branch, channel, region, officer or project, to roll new initiatives into the financial reporting, and to evaluate.

Leaders need to see a strategy's financial effects on the general ledger, accounts payable and fixed assets in one place. Integrated accounting data provides a clearer picture of performance and greater insight to influence it. A solid financial accounting reporting system leverages the past to enhance future performance.

Looking Ahead

To thrive, financial institutions should always be looking ahead. But leaders need accurate, structured information about where they are and where they've been.

An integrated approach to accounting can lay the foundation for good decision making, flexibility and stability, even during accelerated change. There is strength in those numbers.