• Gordon McHarg, CEO at AutoRek


• 26.05.2023 06:58 am

1. AutoRek has expanded into new sectors in recent years. Which sectors within financial services stand to benefit the most from automation?

Automation has the power to overhaul businesses across all sectors. But, due to it being a data-heavy industry, the financial services sector is in a prime position to benefit. By utilising intelligent automation to enhance processes, such as data reconciliation or financial control processes, which are both time-consuming and complex, firms can significantly streamline their operations, reducing both the time required and the complexity of the process. Additionally, no matter how stringent teams are, an element of human error will always creep in. Automating these processes significantly reduces this risk.

Payments firms are set to benefit hugely from automation, especially those looking to scale operations. According to our Payments Industry Outlook 2023, almost a quarter of firms (22%) claim that the more their payments volumes increase, so do their operating costs. Investing in automation will achieve better scalability and prevent rising back-office processing costs as the regulatory burden increases.

2. What do you see as the primary challenges for your clients? Are these likely to get worse in the coming months and years?

It has been a challenging few years across the board – from the COVID-19 outbreak to the ‘Great Resignation’ and ongoing macroeconomic uncertainty, firms have had a lot to contend with. However, the one challenge that remains constant is the regulatory burden placed on organisations. 

Whilst regulators in the UK are still working out exactly what Brexit means for the UK financial services industry, and with the scope of the Edinburgh Reforms still very much unclear, the future of regulation remains uncertain. 

One thing that is certain, however, is that regulations will change and evolve, and regulators will continue to clamp down on compliance failures. This means firms need to ensure that they are meeting their regulatory objectives in an efficient and seamless manner. And more often than not, flawless data reconciliation, management and control are at the heart of regulatory compliance – whether that’s MiFID, CASS, CSDR, IFRS 12, or ISO 20002, getting on top of data is essential to easing this burden. Not only does this help ease today’s regulatory burden, but it will also undoubtedly help with tomorrow’s too. 

3. What are the pitfalls for firms in the financial sector when it comes to automation?

As firms think about what the next five, ten and fifteen years might look like, the answer is very consistent: automation is always high on the agenda. In fact, we recently surveyed the asset management sector for our Investment management industry outlook 2023 report and were delighted to find that 100% of respondents plan to maintain current levels of investment in automation, while three-fifths of firms are actively seeking to increase their budget for automation this year. However, when it comes to executing an effective automation strategy, businesses are less clear on the first step.

A lack of in-house expertise can hold firms back from finding solutions appropriate to their size, client base and services. Customised solutions are preferable to help seamlessly incorporate new technologies into legacy systems, processes, and policies. But going it alone without the relevant experience can leave processes more complex than ever and create more work later down the line. 

4. AutoRek has grown significantly over the last few years. What has contributed towards the success of the business?

The constant innovation of our products is essential to us keeping pace with rapidly changing market demands and our recent rebrand reflects this continual evolution. Having a future-facing outlook has been at the heart of our continued growth, enabling us to always be at the forefront of regulatory changes and reporting requirements to support our clients. Having a customer-centric approach means that we’re always pre-empting what their needs might be in the future, and this mindset allows us to stay at the cutting-edge of innovation.

As recent economic headwinds have highlighted, there are always going to be positive and negative periods for the market. But, embedded in AutoRek’s success is an understanding that we always need to be prepared to adapt our solutions for the evolving needs of financial services. This agility has helped us to adapt to the changing circumstances and needs of our clients.

5. AutoRek has been around for over two decades. How has the fintech industry changed over this period and how do you think it will change over the next 20 years?

When people think about the fintech industry, they often still initially picture a start-up, but we’re certainly getting to a point where many of the most successful fintechs are well-established and might look (in employee headcount at least) more like a traditional player than a new venture. That puts the sector at an interesting inflection point, where it straddles both cutting-edge innovation and breadth of experience that might span a decade or more.

There’s no question that we’re living in a period in which change accelerates at a faster rate than ever before and this means that in truth, we don’t even know what the industry will look like twenty years from now. With the development of machine learning and generative AI, the fintech sector is likely to change as much in the next five years as it has in the past twenty-five. But the foundation of its success to this point – namely, a desire to innovate and streamline complexities – will drive the sector forward into this new period of change.