Charles Drayson

Jan 12 · 10 min read

Software projects in the financial services sector are a special case. The financial services sector is attractive for many vendors because the organisations command substantial budgets for software and IT services, they operate at scale, and they do what it takes to support projects for the long term. Still, financial services work in a context that brings particular requirements.

Back-Office or Costumer-Facing?

At Legito, we say our software exists to help back-office professionals. Within financial services, back-office teams do some work that is part of the customer offering, even if they do not interact directly with customers.

It will be helpful to sub-divide back-office work into at least two categories:

• Back-office processing for financial services
• Back-office support for the financial services organisation

Examples in the first category could include processing the KYC (Know Your Client) documents for anti-money laundering or issuing mortgage offer documents. The second category covers the functions of the HR team, the real estate team, the legal team, and other functions found both within and without financial services.

 Regulations

The distinction between the categories is often relevant for regulatory reasons. Within Europe, most back-office functions are familiar with working under the data protection regime. But back-office functions in financial services might also attract additional regulation if they pertain to the core financial services activities. Such regulation varies across jurisdictions, but there are common trends.

Within Europe, the European Banking Authority (EBA) publishes Guidelines on Outsourcing Arrangements which are more than mere guidelines and cover more than outsourcing. The definition of outsourcing is wide enough to potentially include the use of software-as-a-service to perform activities provided by a payment institution.

Digital transformation of back-office services critical to the delivery of financial services will be more heavily regulated than back-office services associated with more common back-office functions, like HR. There is no reason to abandon projects in the former category, but it might be easier to begin digital transformation with the latter category.

Enterprise adoption

Within some organisations, there will be people or teams with enough agency to instigate a project to deploy new systems. Aided by the growth of no-code solutions like Legito, often with free trials, citizen developers can make substantial progress without the need for IT assistance, significant budgets or enterprise support. That can still happen in financial services, but our experience is that projects need wider sponsorship before they move from non-production pilot projects. 

If financial services organisations impose more due diligence and procedural compliance to deploy new software, it makes sense to select solutions that have the widest application and the biggest potential to deliver measurable benefits. Some functions (payroll processing, for example) are sufficiently big and specialist to justify a vertical solution with no wider application. That still leaves much back-office work that is not so specialised. Moreover, solutions like payroll frequently operate at the end of a process that begins outside the scope of the application. For example, the output of a new joiner process will be the input for a payroll process. The output from the payroll process will be the input for updating a staff loan process.

Solution selection

Selecting a solution designed for enterprise adoption facilitates expansion after initial projects prove their worth. Financial services usually operate at scale, so it becomes feasible for an organisation to build a centre of excellence to leverage the experience and skills gained from initial projects. In turn, that makes it more likely that employees make an effort to acquire that experience and skill to enhance their roles and careers.

If enterprise-wide systems are more compatible with the needs of financial services, they must also accommodate the very different needs of each back-office function. The HR team, the real estate team, the legal team, the procurement team – all have different needs, diverse KPIs, and focus on different data.

At some level, they may join up, and tasks might flow between them, but it is neither desirable nor permissible to present the same views and tools to all of them. Workspaces, dashboards, reports, workflows and document stores must be customised. The customisation should be done by the people who understand best the requirements of their colleagues, which means no-code configuration that is visually intuitive without compromising data integrity, access controls or compliance.

Financial services objectives

The Economist Intelligence Unit Industry Outlook 2023, expects difficult conditions for the financial services sector in 2023. Still, the established players will benefit from resilience measures adopted over the last decade. Nevertheless, they anticipate organisations will further increase digital services to improve performance. More challenges lay ahead for new entrants who will need to curtail expenses sharply. In this sector, and at this time, cutting costs and improving performance cannot be to the detriment of the quality or responsiveness of processes that support operations.

Back-office services must play their part. If digital transformation sounds too radical in the short term, it will be imperative in the medium term. A path to incremental improvements, each delivering fast ROI without disrupting business-as-usual, will be more attractive than big projects. We expect to see the uptake of Legito-type features to augment the work of back-office teams, relieve the pressure on those teams, and facilitate performance improvements and leverage internal expertise in key functions. At a time when more colleagues are working from home, when skills shortages exist despite an economic downturn, and when employees increasingly shun pressurised working conditions, only human-friendly solutions can power digital transformation.

Compliance, command and control

“It’s easier to get forgiveness than permission” has become the rallying call of employees who espouse pragmatism in the face of bureaucracy. In many cases, they wouldn’t need that excuse if business processes were proportionate and well-designed, but that’s beyond the scope of this article. In any event, it’s not a philosophy conducive to a long career in financial services. Still, long policy documents published on SharePoint rarely promote reliable and verifiable compliance in organisations that employ as many staff as financial services.

We believe compliance is better promoted with systems that intuitively steer employees to do the right thing by default, mixed with rules to intervene for those who might be inclined to push their luck. We also believe that it’s easier to exercise oversight of systems designed with such features rather than naively assuming managers or approvers can manually scrutinise every document with 100% reliability. Financial services require compliance, command and control that is effective, not ethereal. Bland box-ticking isn’t going to fool anybody for long.

 However, the back-office of financial services deals with volume and complexity, which means systems must be simple but not simplistic. Creating the correct blend of compliance, control and agility requires a toolbox with rich features.

People like you

If you recognise your requirements in this article, talk to a Legito consultant. Legito customers include global brands with a reputation to keep – our consultants are sensitive to the needs of mature companies in regulated sectors, including financial services. 

More Industry Insights

Charles Drayson

Nov 17 · 5 min read

A business case is not the same as a predicted return on investment (ROI), even if those terms seem to be used interchangeably. The objective is to demonstrate that a project is worth doing, perhaps to gain executive support, but perhaps to satisfy yourself before you put your reputation on the line. I suggest a business case is a reason to execute a project, and an ROI is an accounting device to project a financial advantage that includes figures for the costs and the rewards. It’s useful to consider both concepts, even if you are not asked for both. Otherwise, you might overlook some gems.

Long before Legito existed, I deployed a first-generation document automation solution for a sales team of 70+ people. I had a personal need to make the project work (I was struggling to do my job without something to bring order out of chaos), but I needed a more corporate motivation to win support for the project. Some projects will have a solid business case without a compelling ROI unless you take a wide interpretation of ‘return’ in an ROI calculation (a risky approach if your audience is cynical).

Sometimes, the need to change is self-evident. Don’t let a request for an ROI obscure a manifest business need. Call the business case what it is.

My observation from supporting sales teams in the IT industry is that sponsors respond to an overwhelming business case even if they have asked for an ROI. Some bid teams try to express the business case using an ROI, and there’s no harm in that if the message isn’t lost in translation. Don’t let the numbers do a job that ought to be done by a clear statement of need. If one relies on an ROI as the principal expression of a business case, people try to assign numbers to some benefits that are tricky to express numerically with much precision or evidence. If that happens, cynics find it easy to pick a fight with the numbers, and the battle is lost.

This is a particular problem for projects designed to promote governance and compliance. You could build an ROI calculation using numbers based on projected penalties from fines or litigation. However, many organisations have no direct experience of costly litigation or the heavy hand of regulatory fines, so the numbers might look too remote. The same difficulty applies to putting a number on lost business opportunities. In some industries, an organisation wouldn’t survive to recover from a governance or compliance failure. There’s no reliable data to put a figure on lost business. In those cases, speak truth unto power and be clear about the need. If the need isn’t sufficiently compelling, the project isn’t going to get support regardless of the ROI.

The project I described as a ‘just fix a broken process’ did deliver an impressive ROI, even if that was not our objective. If you can deliver ROI while meeting business needs, it will be easier to command support. Moreover, it could be the difference between getting mere approval for deployment and getting resources needed to increase the likelihood of success (for example, a budget to buy in some external consultancy assistance).

When measuring the benefits from Legito document automation, be sure to consider the cost of people checking for errors, fixing errors, and resolving formatting issues associated with legacy document drafting.

Here is a list of metrics you might consider measuring when building an ROI calculation:

Legito projects typically start small and expand after an initial quick deployment. It is usually possible to build a good ROI for a starter project – there’s no need to over-complicate the calculation by projecting results over a long IT project.

If you need help with an ROI, the Legito consultants have the experience to provide metrics from comparable projects. However, there’s nothing like a trial project to prove them for yourself.

A business case is not the same as a predicted return on investment (ROI), even if those terms seem to be used interchangeably. The objective is to demonstrate that a project is worth doing, perhaps to gain executive support, but perhaps to satisfy yourself before you put your reputation on the line. I suggest a business case is a reason to execute a project, and an ROI is an accounting device to project a financial advantage that includes figures for the costs and the rewards. It’s useful to consider both concepts, even if you are not asked for both. Otherwise, you might overlook some gems. 

Long before Legito existed, I deployed a first-generation document automation solution for a sales team of 70+ people. I had a personal need to make the project work (I was struggling to do my job without something to bring order out of chaos), but I needed a more corporate motivation to win support for the project. Some projects will have a solid business case without a compelling ROI unless you take a wide interpretation of ‘return’ in an ROI calculation (a risky approach if your audience is cynical).

My first project appeared to be one of those. External events (think litigation, disgruntled shareholders, demanding audit conditions) transpired to deliver a clear imperative to deliver good governance of the sales / contracts /invoicing process. Cost savings, efficiencies, and cycle times were not on the list of objectives. Just fix a broken process.

Sometimes, the need to change is self-evident. Don’t let a request for an ROI obscure a manifest business need. Call the business case what it is.

My observation from supporting sales teams in the IT industry is that sponsors respond to an overwhelming business case even if they have asked for an ROI. Some bid teams try to express the business case using an ROI, and there’s no harm in that if the message isn’t lost in translation. Don’t let the numbers do a job that ought to be done by a clear statement of need. If one relies on an ROI as the principal expression of a business case, people try to assign numbers to some benefits that are tricky to express numerically with much precision or evidence. If that happens, cynics find it easy to pick a fight with the numbers, and the battle is lost.

This is a particular problem for projects designed to promote governance and compliance. You could build an ROI calculation using numbers based on projected penalties from fines or litigation. However, many organisations have no direct experience of costly litigation or the heavy hand of regulatory fines, so the numbers might look too remote. The same difficulty applies to putting a number on lost business opportunities. In some industries, an organisation wouldn’t survive to recover from a governance or compliance failure. There’s no reliable data to put a figure on lost business. In those cases, speak truth unto power and be clear about the need. If the need isn’t sufficiently compelling, the project isn’t going to get support regardless of the ROI.

Looking back on many projects related to document-orientated solutions, there was a business case that could be readily expressed with a few statements of need. Still, it was also possible to build a compelling ROI, even if some of the returns were incidental or perhaps unrelated to addressing the stated needs.

The project I described as a ‘just fix a broken process’ did deliver an impressive ROI, even if that was not our objective. If you can deliver ROI while meeting business needs, it will be easier to command support. Moreover, it could be the difference between getting mere approval for deployment and getting resources needed to increase the likelihood of success (for example, a budget to buy in some external consultancy assistance).

Before you build an ROI for Legito, take a free trial. A free trial is a great way to build confidence that you have selected the correct tool, but it is also an opportunity to experiment with a prototype solution to generate metrics for an ROI. The Legito consulting team sometimes gets involved in a trial project. Legito consultants can often build a rapid initial solution sufficient to prove capability as well as helping you to measure some initial results. Legito projects often start with a document automation project (automatic production of tailored documents using variable data) to replace a legacy process of manual document creation. The time saved from manual document creation to automated drafting is easy to measure, and frequently reveals obvious savings with irrefutable evidence.

When measuring the benefits from Legito document automation, be sure to consider the cost of people checking for errors, fixing errors, and resolving formatting issues associated with legacy document drafting.

Here is a list of metrics you might consider measuring when building an ROI calculation:

Legito projects typically start small and expand after an initial quick deployment. It is usually possible to build a good ROI for a starter project – there’s no need to over-complicate the calculation by projecting results over a long IT project.

If you need help with an ROI, the Legito consultants have the experience to provide metrics from comparable projects. However, there’s nothing like a trial project to prove them for yourself.

A business case is not the same as a predicted return on investment (ROI), even if those terms seem to be used interchangeably. The objective is to demonstrate that a project is worth doing, perhaps to gain executive support, but perhaps to satisfy yourself before you put your reputation on the line. I suggest a business case is a reason to execute a project, and an ROI is an accounting device to project a financial advantage that includes figures for the costs and the rewards. It’s useful to consider both concepts, even if you are not asked for both. Otherwise, you might overlook some gems. 

Long before Legito existed, I deployed a first-generation document automation solution for a sales team of 70+ people. I had a personal need to make the project work (I was struggling to do my job without something to bring order out of chaos), but I needed a more corporate motivation to win support for the project. Some projects will have a solid business case without a compelling ROI unless you take a wide interpretation of ‘return’ in an ROI calculation (a risky approach if your audience is cynical).

My first project appeared to be one of those. External events (think litigation, disgruntled shareholders, demanding audit conditions) transpired to deliver a clear imperative to deliver good governance of the sales / contracts /invoicing process. Cost savings, efficiencies, and cycle times were not on the list of objectives. Just fix a broken process.

Sometimes, the need to change is self-evident. Don’t let a request for an ROI obscure a manifest business need. Call the business case what it is.

My observation from supporting sales teams in the IT industry is that sponsors respond to an overwhelming business case even if they have asked for an ROI. Some bid teams try to express the business case using an ROI, and there’s no harm in that if the message isn’t lost in translation. Don’t let the numbers do a job that ought to be done by a clear statement of need. If one relies on an ROI as the principal expression of a business case, people try to assign numbers to some benefits that are tricky to express numerically with much precision or evidence. If that happens, cynics find it easy to pick a fight with the numbers, and the battle is lost.

This is a particular problem for projects designed to promote governance and compliance. You could build an ROI calculation using numbers based on projected penalties from fines or litigation. However, many organisations have no direct experience of costly litigation or the heavy hand of regulatory fines, so the numbers might look too remote. The same difficulty applies to putting a number on lost business opportunities. In some industries, an organisation wouldn’t survive to recover from a governance or compliance failure. There’s no reliable data to put a figure on lost business. In those cases, speak truth unto power and be clear about the need. If the need isn’t sufficiently compelling, the project isn’t going to get support regardless of the ROI.

Looking back on many projects related to document-orientated solutions, there was a business case that could be readily expressed with a few statements of need. Still, it was also possible to build a compelling ROI, even if some of the returns were incidental or perhaps unrelated to addressing the stated needs.

The project I described as a ‘just fix a broken process’ did deliver an impressive ROI, even if that was not our objective. If you can deliver ROI while meeting business needs, it will be easier to command support. Moreover, it could be the difference between getting mere approval for deployment and getting resources needed to increase the likelihood of success (for example, a budget to buy in some external consultancy assistance).

Try a Free Trial

Before you build an ROI for Legito, take a free trial. A free trial is a great way to build confidence that you have selected the correct tool, but it is also an opportunity to experiment with a prototype solution to generate metrics for an ROI. The Legito consulting team sometimes gets involved in a trial project. Legito consultants can often build a rapid initial solution sufficient to prove capability as well as helping you to measure some initial results. Legito projects often start with a document automation project (automatic production of tailored documents using variable data) to replace a legacy process of manual document creation. The time saved from manual document creation to automated drafting is easy to measure, and frequently reveals obvious savings with irrefutable evidence.

When measuring the benefits from Legito document automation, be sure to consider the cost of people checking for errors, fixing errors, and resolving formatting issues associated with legacy document drafting.

Here is a list of metrics you might consider measuring when building an ROI calculation:

Legito projects typically start small and expand after an initial quick deployment. It is usually possible to build a good ROI for a starter project – there’s no need to over-complicate the calculation by projecting results over a long IT project.

If you need help with an ROI, the Legito consultants have the experience to provide metrics from comparable projects. However, there’s nothing like a trial project to prove them for yourself.

More Industry Insights