Six key challenges finance professionals face and ways to overcome them

Managing organisational finances comes with several hurdles, like keeping up with advances in technology, regulatory compliance, data management, and cybersecurity. This article explores some of the most significant challenges finance professionals face and provides potential solutions to overcome them.

1. Compliance

Compliance in the finance industry is a big deal. Different regions have their own rules; in Australia, the Australian Privacy Act of 1988 primarily governs regulation, while across Europe, it's the General Data Protection Regulation (GDPR).

The integration of technology like AI and machine learning into financial operations helps with fraud detection, trading, credit scoring, and personalised financial advice. However, it also presents challenges related to fairness, transparency, and accountability, including the risk of algorithmic bias and data privacy breaches.

Compliance management systems provide features such as regulatory reporting, activity monitoring, and automated compliance workflows, which ensure adherence to complex regulatory frameworks. These systems integrate up-to-date regulatory and compliance standards, enabling finance professionals to stay current with evolving requirements.

In addition to these systems, finance professionals can also implement internal dashboards and reporting tools that provide visibility into key performance indicators. By automating these processes and implementing real-time reporting tools, finance professionals can streamline compliance management and reduce time spent on administrative tasks. This enables them to focus on more strategic initiatives.

These systems also provide alerts to flag non-compliant behaviours like insider trading, market manipulation, money laundering, and conflicts of interest by alerting the right authorities and helping uphold organisational integrity.

2. Legacy systems

These are reliable, but they may be inflexible and outdated. When companies try to integrate these systems with newer technologies, they often face compatibility issues that make operations and data flow more difficult.

One solution to this problem is cloud integration, which involves connecting existing legacy systems with cloud-based services or platforms. This enhances accessibility, as employees can access data and applications remotely from anywhere with an internet connection. Moreover, using a cloud system eliminates the need to maintain physical infrastructure, reduces overhead expenses, and enables companies to pay only for the resources they use. However, when moving to the cloud, companies must pay attention to data privacy regulations and security concerns. 

Another way to modernise operations is Robotic Process Automation (RPA) systems, which automate repetitive tasks, reduce errors, and improve overall efficiency. This frees up valuable time for strategic decision-making. By combining RPA with advanced data management tools and a cloud-based system, finance professionals can easily succeed in the digital era.

3. Data management

Managing data is challenging, as it requires accurate record-keeping, timely financial reporting, financial analyses, and regulatory compliance. Managing financial data is even more tricky, as it's generally sensitive and personally identifiable information. The sheer volume and complexity of financial data can often result in chaos if not managed effectively. 

To address this challenge, finance professionals can start by implementing advanced data management tools that help them process financial data efficiently. These tools automate repetitive tasks like entering data, processing loan applications, and generating tax forms, while also offering insights to enhance decision-making.

When using multiple systems for business data management, it's important to be aware of overlaps and duplicate entries. To mitigate the chances of duplication, finance professionals can integrate the data systems they use and create a streamlined process that ensures consistency in data handling and reporting.

4. Cybersecurity threats

Cyber criminals are always coming up with new ways to disrupt organisations, no matter how big or small they are. Ransomware, phishing, distributed denial-of-service (DDOS) attacks, and malware are some of the most common types of cyberattacks.

Recently, SecurityBrief Australia reported that the Australian financial services industry experienced a significant increase in DDOS attacks during 2021 and 2022. This is a big concern, and to protect organisational data, finance professionals need a multi-layered approach to cybersecurity that includes both technology and employee awareness.

The solution is a cloud software system that has built-in security mechanisms. Using encryption protocols, firewalls, and intrusion detection systems can protect against external threats, but it's also essential to make sure employees are aware of data security best practices. Regular cybersecurity audits, simulated phishing exercises, and incident response drills can help businesses identify vulnerabilities and improve defences.

During a cyberattack, it's crucial that employees promptly report incidents to their organisation's designated IT security team or Chief Information Security Officer (CISO) to initiate swift response and mitigation measures.

5. System downtime

When systems go down, it's more than just an inconvenience; it can disrupt crucial financial processes, slow down productivity, and even result in financial losses. Moreover, it can spoil an organisation's reputation and leave customers unhappy.

To prevent these problems, organisations need to manage their IT infrastructure actively. This means using backup systems, setting up redundant servers, and utilising cloud-based solutions so that even if one system fails, access to data remains uninterrupted. Ultimately, this keeps the business running smoothly.

6. User adoption

Adopting new technologies often comes with a significant learning curve, especially without proper training and support. This can lead to a lack of confidence in using new systems and a resistance to change.

To overcome this challenge, finance organisations need to prioritise training and choose software vendors that offer comprehensive user education programs. This helps ensure that employees have access to the educational resources they need. By offering continuous training programs, workshops, and hands-on learning experiences, the organisation can help employees feel more confident in using the new technology.

Furthermore, by addressing the challenges in user adoption head-on, organisations can ensure that their investment in new technology pays off in the long run.

Finance organisations face a broad range of operational challenges, from regulatory compliance requirements to inaccuracies in sensitive data. Tools like compliance management systems, cloud-based integrations, RPA, and advanced data management systems can help finance professionals streamline work and be more efficient. Learning to use these technology systems within the organisation is the key to making informed decisions and running a successful business.