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Wednesday 15, March 2017 by Nabilah Annuar

Benchmarking human resources in finance

Talal Bayaa, Chief Executive Officer and co-founder of Bayzat, discusses the advantages of automation in human resources for financial institutions.

Human resources (HR) departments in financial institutions face significant challenges as their roles continue to become broader and more strategic. In today’s challenging economy, the human resource departments in banking and financial services need to be more efficient than ever to respond to the constantly changing internal and external pressures. These type pressures often challenge their ability to achieve operational excellence, improve work effectiveness, and capitalise on the growth of emerging markets. Almost every financial institution and bank is involved in various operations and requires a highly effective team and appropriate manpower to run the show. Corporate goals are translated into viable realities and profits only when staff plays an active role in achieving the desired results.

Automation is a new category of programming that is widely being adopted by financial institutions with time savings reported of up to 50 per cent in select back office processes. For instance, let’s look at the banking industry where process automation could transform the way business is done. A study conducted by Bain and Company reported that banking customers submit only 14 per cent of loan applications through digital channels. And, on average, banks only handle seven per cent of products digitally end-to-end.

Using HR automation to boost bottom line

Businesses today are realigning the role of HR, so they can best manage and grow their company profitably and cost effectively. Despite the inefficiencies, many financial institutions continue to follow traditional paper-based HR processes; while some companies outsource HR functions, so that internal resources can allocate more time on strategic issues on how to grow the company. Banking executives need to be aware of how much time is spent acquiring new talent. They have to ensure that current HR service delivery model aligns with the company’s strategic goal and revenues sources; while making sure that employee benefit costs compare with other institutions in the same industry.

Managing the employment of staff, monitoring their progress, handling payroll, and employee benefits are a few responsibilities that fall under the role of an HR Manager. The routine administration involved in the day-to-day HR operations drains time and resources. According to a recent research report published by Ed Lawler and John Boudreau from the centre of Effective organisations, more than 50 per cent of the human resources department’s time is spent processing employee information and answering questions.

To help make their job easier, banks and financial institutions across the world are investing in human resources technology—software programmes that will allow automation to occur. While it might seem like an expensive proposition, the truth is that automating certain tasks has a number of benefits that can ultimately boost an organisation’s bottom line.

Doing more for less with HR technology tools

The financial services and banking industry has undergone significant change over the last decade, and today, HR automation is at the forefront of this change. It is the first step to the process of transitioning an organisation’s onerous, time-consuming paper-based HR processes to a streamlined online system. The financial services industry is perhaps the industry with the highest potential for process automation. With efficiency and competitiveness hand-in-hand and customer service as a bi-product of this, automation can significantly lower costs and increase overall resource efficiencies.

Financial institutions in the UAE are increasingly embracing automation tools and self-service to focus on their core competencies instead of spending valuable time on administrative paperwork and data management hassles. Studies show that HR automation results in significant time efficiencies and cost-reductions. The right automation tools can help reduce time spent on HR administration by 50 per cent and save up to 40 per cent in administrative cost savings (according to a report by Sage).

Within years the UAE has turned into a regional financial hub. The financial services industry in the UAE is moving from the traditional, paper-based methods to a more secure HR management system that will provide a high return on investment. With the  technology integrated in the platform, data entry becomes effortless, allowing HR managers to drag and drop employee documents as it extracts, secures and stores all relevant employee data from hard copies such as passports and IDs. Furthermore, all data will be backed up in cloud servers, ensuring that data is securely stored. With automation, the rate of error also drops, avoiding any issues that may arise with manual human involvement.

Once the digital directory of employee records is created, any paper or spreadhseet documentation will no longer be needed. By empowering employees with the right tools and putting appropriate levels of information directly in the hands of those who need it most, companies are able to foster better relationships with their workers as well. This in itself can have a significant impact on a business bottom line and can bring new levels of success.

The next phase of HR and workplace automation in banks and financial institutions will be mainly around optimisation and digitisation. The most effective and influential leaders will be the ones who can make existing processes more efficient while discovering ways to use technology to unlock the true value of current resources.

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