How back-office automation reduces costs and encourages growth

Posted: 10/05/2023 | Read time: 4 minutes


Financial services firms are facing challenging market conditions in 2023. After two years of uncertainty caused by the COVID-19 crisis, organisations now operate amid a tumultuous geopolitical climate, soaring levels of inflation, and an economy teetering on the edge of recession.  

Many firms have taken to cost-cutting measures to weather the financial storm. But many don’t realise that by investing in digital transformation and automation – rather than simply making cuts – financial services firms have a better chance of succeeding and reducing costs in the long run. 

A recent study from McKinsey confirms this view. The report, which evaluated how 1,200 businesses fared amid tough trading conditions, found those that performed well during periods of economic decline were more likely to have improved margins. Many achieved this by “improving operating efficiency through upskilling and digital innovation that increases frontline productivity.” 

Automating the back and middle office is a critical part of digital transformation – and key to the financial success of companies across the investment, banking, payments and insurance sectors. It enables companies to build robust controls, improve operational efficiency, foster a better organisational culture, and gain full control over data.  

All of this contributes to healthier balance sheets and reduces costs in the future.  

In this blog, we explain how firms can reduce costs through automation. Divided into two sections, it covers: 

  1. The hidden costs of relying on spreadsheet
  2. The 5 ways back-office automation reduces costs 


The hidden costs of manual processes 

Firms are attracted to Excel because of its initial low cost. However, relying on old-fashion systems, such as spreadsheets, to conduct crucial processes is a false economy. Spreadsheets end up costing firms more in the long run, as organisations will have to throw more resources – and therefore spend – to plug gaps and fix problems.  

Reconciliations are complex, with multiple different steps. With the regulatory burden increasing, and data volumes growing, finance and operations teams still using manual processes will find themselves buried in data and manual work.  

Relying on manual processes will increase costs for the following reasons: 

  • It’s operationally inefficient and wastes time and resources 
  • Spreadsheets are inflexible and can’t accommodate growth. Growing volumes of transactions to be reconciled will also require a corresponding rise in headcount.  
  • Firms increase their risk of misreporting and non-compliance 
  • Repetitive tedious tasks lead to employee dissatisfaction and higher staff turnover 


How automating reduces costs: The 5 key benefits 

Operational automation is a powerful tool for organisations with cost-reduction objectives. It decreases the time spent on reconciliations by at least 75% – and reduces operating costs by 50%.  


The 5 ways automation reduces costs: 


1. Reduced operational costs by streamlining processes 

Eliminating manual processes is a great way to streamline operational procedures. By saving time and freeing up resources, businesses can instead focus on core objectives and value-add tasks. Not only does this reduce costs for existing operations, but it lowers investment as operations scale. 

2. Reduced risk of penalties with greater data control  

Firms that automate have access to real-time data, reliable MI and comprehensive audit trails – increasing the accuracy of reporting. This mitigates the risk of incurring unnecessary penalties and having to allocate more resources to satisfy auditors, regulators and busy period-end reporting.

3. Higher staff satisfaction and reduced personnel costs  

Automating the back office frees operational teams from repetitive and tedious manual tasks. This saves time and resources of valuable colleagues and means firms don’t have to hire new members of staff. It also increases the job satisfaction of key existing employees, which reduces turnover and cuts recruiting costs.  

4. Growth is accommodated and encouraged 

Spreadsheets are not scalable, so they can’t accommodate either organisational growth or rising data volumes. A flexible, automated solution, however, will grow as you grow. It can also adapt to changes in regulatory reporting requirements. 

5. ROI in months 

Automation requires investment. It’s why so many organisations remain wedded to spreadsheets. But those forward-facing firms that automate their financial controls will achieve ROI within months, as it saves money in the long run. 



Manual processes are simply not suitable for the modern financial services landscape. Automation is no longer just “nice-to-have” – it’s a prerequisite for building a robust business that enjoys strong growth and financial success.  

The sooner financial services firms recognise that it’s not a question of if, but when firms should automate, the sooner they can reduce unnecessary costs, increase profit margins, and improve operational efficiency. 


To see if the AutoRek solution is the right fit for your organisation, request a free, no-obligation demo with a member of our team. For more information, get in touch at [email protected].