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By All Accounts

By: Steven Brenner and Shannon Klabnik

In the world of banking, the ability to track the movement of funds into systems has always been a top priority. While computers have exponentially increased tracking and monitoring capabilities, the digital world has also introduced a great deal of additional complexity into the banking system. Increasingly, banks of all sizes are beginning to understand that technical advancements have only increased the need to introduce a correspondingly powerful in-house financial management framework.

This need is now becoming more urgent in today’s regulatory environment. With the contours of the technology landscape changing rapidly, and with security being a bigger concern than ever before, the legislative environment within the industry is constantly evolving to keep up with new technical and operational mandates. As a result, regulatory compliance poses a significant challenge for administrators and decision-makers at banks and financial institutions, and optimizing processes for governance, risk and compliance is more important than ever.

For many banks, leading edge financial management software solutions are the answer. When implemented correctly and utilized optimally, such solutions can play a vital role in managing the inherent complexities of modern-day banking, mitigating risk of noncompliance, realizing new process efficiencies and fueling organizational growth.

Benefits

The benefits of financial management software begin with the ability to ensure that compliance requirements are met and sound business decisions are made. State and federal regulatory agencies have introduced a wide range of compliance mandates, and satisfying those mandates requires the ability to not only precisely track funds, but also to proactively prevent those funds from being mishandled or misappropriated. The latest financial management software provides banks with a selection of options that can be configured according to a range of criteria. Decision-makers can specify controls for a certain amount, within a certain timeframe and for a certain purpose. Additionally, if an attempt is made to move or use funds outside of those parameters, the system can automatically prevent that from happening and can trigger a review process. Leading systems can also make it possible to track funds by source, by type of transaction, by geography and by location within the bank’s internal system. That level of flexibility and functionality unlocks the broader ability to set up strategic budgetary, reporting or auditing controls, and makes it possible to configure a system based on specific bank needs and compliance requirements.

Beyond sophisticated safeguarding and monitoring capabilities, current-generation financial management software also offers the potential for powerful efficiencies for streamlining and securing data and eliminating redundant data entry requirements. With traditional non-integrated systems, data is passed within the organization from one department to another, and often has to be re-entered into another sub-system. With an integrated system, data can simply be shared across the system, eliminating data entry errors, saving enormous amounts of time and resources while creating audit trails and making it easier to track activity.

Leading Practices

Even the most sophisticated functionality will only be effective if it is carefully tailored to meet the operating and auditing needs of each bank. Software providers and consultants should work closely with the bank’s executive leadership to outline big-picture priorities, and then consult with managerial and associate-level team members to determine the details of bank-specific processes and functionality elements. Every step from the user interface to the rules by which the system will operate is configurable, and getting it right requires thoughtful, deliberate and strategic rigor before the system should go-live.

To further meet compliance requirements, it is now standard practice for institutions to routinely perform internal audits and require systems to date and time stamp all transactions just to keep up with internal controls and audit requirements.  It is perhaps not surprising then that current-generation financial management software is better designed to meet exactly those needs.

Co-authored by Steven Brenner and Shannon Klabnik of MIPRO, a consultancy specializing in implementations, upgrades and optimizations of Oracle’s PeopleSoft applications. Brenner serves as senior principal consultant and Klabnik serves as PeopleSoft practice director. To learn more about MIPRO, visit www.miproconsulting.com.


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