Today, technology is changing the way businesses operate and deliver products to consumers in many fields. We have medical equipment that can identify life-threatening conditions in our body, alarms that detect poisonous substances in the air, and smarter computer software that makes controlling vital equipment easier than ever before.
An industry that has seen a huge amount of innovation in recent years is the use of technology within the financial world. The new buzzword ‘FinTech’ is becoming more and more popular and has asserted its place in the sector, with an ever-evolving consumer and corporate focus. Most companies now see the need to keep up with advancements in the sector as they have no other choice. The disruption that technology is bringing in the finance sector is massive.
Importance of Technology in Financial Management
Financial management is one of the most essential areas of a company. Companies must have an up-to-date and thorough knowledge of the expenses in their business, to know how much they can invest further in the future.
The flow of information that exists in companies today is huge, so companies must adopt technological solutions to the specifics of their business so that they can take full advantage of the benefits that technology provides us.
1. Centralization of information
The sharing of information on the Internet, namely in the Cloud, enables all employees of a company to have access to the same document, facilitating their consultation and editing. However, ERPs (Enterprise resource planning) are complete resources that interconnect all sectors of the company, thus computerizing the data and automating the processes.
To complete the ERP solution, technology now provides us with another solution: the BAM system. Software like Multipeers allows information from all of the company’s data sources to be consulted on a single dashboard and in real-time, which thus facilitates better decision making.
2. More efficient decision making
With a system that generates reports in a simple, yet quick way, it becomes much easier to make strategic decisions. Bad decisions often happen because employees sometimes don’t have the real knowledge of what happens in the company. With the use of technology, the decisions taken are more assertive and information becomes more accessible.
3. Mobility: an ally of good management
Employees usually spend some time outside the company at events and meetings. If this was a problem before, due to the technology, now it can be solved. For example, in addition to being able to query information on devices, a few software lets you set business alerts for certain actions.
In another example, if you have a chain of stores and want to be alerted in the middle of the day, that a unit has not completed a task, the software will alert you by email or SMS so that you can act immediately, regardless of where you are.
4. More effective data communication
Technology has today improved communication, as there are multiple systems to transmit information, from cloud solutions, e-mails, software, among others. Internal communication benefits greatly from the use of technology. Also, there have been significant improvements in communication with banking institutions, as it is now possible to make transfers and consult balances and movement from anywhere.
5. Increased productivity
With more efficient technology, automation of processes happens more easily, meaning that now every employee can devote themselves to tasks that need the utmost attention. The result, in the medium and long term, will be a massive increase in the overall productivity, which will then be reflected in the company’s profits.
Benefits of Technology in Financial Management
1. Banking and online transaction
The success of online transactions and advancements in the banking sector is highly attributed to development in technology. Billions of transactions are done daily all over the world. The nature of these transactions is sensitive and critical; it needs to completed with utmost accuracy that will give no room for errors.
This is not possible if a manual process is deployed. All these processes need to culminate in a report that is used to calculate the future projections. This is only possible in an interconnected network system that uses comparative analysis and calculates accurate financial projections.
Everything in the financial sector needs to be secured in totality, be it data, mode of transaction, or the processes involved. The sensitive and critical nature of these transactions needs high security. This requires advanced firewalls and complex software to ensure that the processes are free from external interferences and are seamless for the consumers. Advancements in technology can provide competitive edge services that have enabled a robust and legitimate system.
3. Global outreach
Information on different market conditions all over the world can be accessed through the internet. Also, fluctuations in a particular market area in any part of the world can be easily noticed and can be used to cushion the financial sector in other regions.
This has been possible because of the complex network and database system that interlinks different parts of the world. This is very important in creating regulatory checks and balances in the global market. This also ensures relative stability in the financial sector.
4. Enhancing social media marketing
In the current financial sector, social media cannot be disregarded. A new world of opportunities has been opened with the use of social media for different financial institutions all over the world. It has enabled direct contact between businesses and their prospective clients. This has thus enabled financial institutions to achieve tremendous growth within a short time.
Additionally, social media significantly cuts down the costs that would have been earlier used to do physical marketing, to achieve the same market volumes. Trends and patterns in social media can be used to predict a behavioral change in the market and also generate leads.
Restructuring of the Finance Industry
Responsibilities that once required an expert with many years of experience to spend hours in performing analysis of the company, can now be done with an automated algorithm in seconds. Complex algorithms can make complicated money exchanges, snapshot assessments of risk, and even analyze data far more efficiently than ever before.
For consumers, that’s good news, as it means that they have access to more services in a digital format and at a less expensive rate. For the finance industry, this comes with big changes. As a company’s function evolves to include greater technology responsibilities, modern finance departments need to prioritize a data strategy.
Digital transformation is a necessity. Without progress in the relationship between finance and technology to get actionable insights and to prioritize data, businesses are endangering themselves falling behind their competitors and achieving full potential.
Every business sits on loads of data, but applying technology to compute that data to arrive at strategic insights will help companies achieve their transformational goals. In today’s world where technology offers a significant competitive advantage, the source of competitive advantage shifts to the organization that can apply technology to the most compelling use cases and ensures the adoption of the resulting insights.
If companies embrace their role as an innovative finance leader and elevate their partnership with technology, improvements to planning, budgeting, competitive analysis, and differentiation will take place.
Applications and systems implemented by technology can have a profound impact on how the finance departments analyze and use data to derive insights. With their fusion, companies can solve complex problems and achieve their objectives evolving to a modern, data-driven financial management team that is differentiated and thrives in an increasingly technical industry.