New research commissioned by AutoRek, a leading software provider to companies in the global financial services sector, has revealed the most current problems facing payments firms today, as well as their perceptions on regulation, compliance, and payments reconciliation. According to AutoRek’s latest annual payments survey, 84% of UK and US payment firms rely heavily on manual tasks and spreadsheets to perform the reconciliation control process, while 86% say their data lacks the transparency and standardization required.

The findings show that while reconciliations are a fundamental control mechanism for finance and accounting, many firms across the financial services sector continue to rely on Excel spreadsheets to carry out this crucial process. This is especially prominent in the US, where 88% of US respondents acknowledge that their company relies heavily on spreadsheets for critical financial control processes.

As a result, manual processes can lead to inefficiencies, with 69% of US firms noting that the cost of their payment operations rises in direct proportion to increased payments processing. This is also reflected in the UK with 63% of payment firms seeing a direct correlation between back-office costs and payment volumes.

The expansion of the digital economy, rising transaction volume, and ever-changing regulatory obligations mean that spreadsheets are no longer fit for purpose. These findings show the need for more education around reconciliation, and how it can help businesses automate manual processes and achieve 50%+ cost reduction and save 75% of time. Especially when more than half (55%) of transactions are settled instantly within a payment firm in the US, compared to 45% in the UK.

The research also highlighted the number of payments organizations expecting their cost of compliance to increase over the next 12 months has doubled since 2023, jumping from 38% to 80%.

Some 50% of respondents said higher levels of automation would allow them to save time and support growth objectives. And 50% said it would support their growth objectives, while 45% said it would cut operational costs.

AutoRek’s Payments Lead Nick Botha comments: “In the payments industry, there is a clear trend towards streamlining operations by minimizing manual processes, yet significant investments remain to be taken. Our recent payments report supports the persistent challenge posed by legacy systems within the market, a challenge that we see across firms globally. In recent years, there has been a growing recognition of the requirement for businesses to streamline their operational frameworks to effectively navigate potential disruptions. However, companies need to also ensure that they maximize the profitability of their business, especially in today’s increasingly fast-paced and competitive environment.”