Financial Shared Service Centers: The Future of Financial Services

Financial Shared Service Centers: The Future of Financial Services

Optimising the organisational structure of any business is a crucial step in a world in which productivity is paramount. By offering the duty of maintaining the relevant but mundane operational tasks, businesses can avoid being sidetracked by them and focus on other important aspects of the business. The tasks that are mentioned usually consist of supply chain management, IT, human resources, and finance. Shared service centres (SSC) can be utilised to look after all these tasks.

A financial shared service centre (FSSC) is a centralised unit within an organisation that helps manage various financial tasks. In this blog, it will be discussed why FSSC is the future of financial services. The following reasons support this statement:

• Increasing efficiency
  
  Businesses can increase the efficiency of their operations by assigning different responsibilities to a single unit. This implies that a shared service centre can do jobs more quickly and with fewer resources in comparison to several departments working on them.

• Standardisation
  
  Standardisation is necessary to maintain quality and compliance, especially in big businesses with intricate operations. A shared service model contributes to the standardisation of operations across the organisation by ensuring that each unit adheres to the same standards and industry best practices. This can help in improving accuracy, reducing errors, and boosting whole operational performance.
  
  
• Improved data administration and reporting
  
  SSC consolidates data from several departments into a single, integrated system, enabling better data management and reporting. This unified data facilitates strategic planning and decision-making and enables better reporting, comprehensive analytics, and a coherent picture of corporate performance.
  
  
• Flexibility
  
  As businesses grow and evolve, their operational needs change. A shared service model usually has flexibility, which is needed to adapt to these developments. Centralised functions make it easier to manage growth and adjust to circumstances that are changing since they can be scaled up or down more easily to match organisational demands.

The reasons listed above support the claim that SSC is the financial services industry's future.

In light of these compelling reasons, businesses may wish to adopt shared service centre finance for their the proper management of finance process. The following strategies can facilitate this transition:

• Process alignment
  
  A key element of switching to a shared service paradigm is process alignment. Start by evaluating the current practices that the companies' departments are using. These practices usually comprise onboarding, performance reviews, financial reporting, etc.
  
  The objective is to eliminate any inefficiencies and create consistency by developing a standard set of practices that will be followed throughout the whole company.

• Establish the organisational framework
  
  Establish reporting lines, jobs, and duties inside the centralised unit. To resolve any issues and guarantee a seamless transfer, effective change management techniques are required. 
  
  All of this will support the shared services unit's establishment of a solid organisational foundation.

• An efficient team
  
  To achieve optimal results, an SSC should be managed by a team of highly skilled individuals with a deep understanding of diverse company operations. It’s crucial to ensure that the SSC team allocated by companies possesses these essential qualities.

• Outstanding leadership
  
  It is crucial to have competent leaders who can look after operations. They are able to manage routine problem solving and gradually enhance operations. That is why it is important to ensure that the leadership is outstanding.
  
  
• Understanding current technology
  
  Technology determines whether the shared services idea is feasible or not. Assess if the shared service model can be optimised by the current technology used by the businesses.
  
  Although these ways may be helpful in putting SSC into practice, challenges may still arise, such as.

• Aligning objectives and expectations
  
  Aligning the objectives and expectations of the team members in the organisation is one of the first challenges in creating an SSC. Each individual may hold distinct interests, concerns, and perspectives regarding the SSC, including potential threats to autonomy or job security. 

• Harmonising standardisation

One of the main benefits of an SSC is the standardisation of shared activities or procedures (of HR finance, etc.) across the organisation. However, it can also result in issues, such as the SSC being less adaptable and responsive to the particular needs and preferences of the clients or businesses.

• Preserving compliance and security
  
  It is essential to guarantee the security and compliance of the private data that an SSC handles. SSC can be exposed to security risks, including fraud, theft, and cyberattacks, when managing sensitive data.

These are the challenges that businesses may encounter when implementing the SSC model. Given these obstacles, these implementation strategies may prove ineffective.

In the case of technology, one of the greatest software choices is Mynd Integrated Solutions. This is because its shared service centre uses automation and other technologies to solve transactional difficulties and operational tasks not only in the finance domain but also in accounting.

Businesses can identify such services by searching for shared service accounting or finance providers. 

Conclusion

FSSC is becoming a dependable option for many companies. This is due to its ability to efficiently manage a wide range of financial activities. Businesses can make use of it, but then they too have challenges. That is why it will be wise to make use of Mynd's technologically supported shared service center. This is because it was specially created to use automation and technology to manage particular operational duties and transactional concerns in the field of finance and accounting.