The financial sector processes contracts of all kinds in every corner of the business environment. CFOs and purchasing managers are being forced to juggle an ever-growing list of requirements.
Oversee contracts, execute on tight budgets, maintain sound supplier management, streamline purchasing processes, and manage suppliers. Appropriate controls must also be put in place to manage a wide range of risks and audit trails.
As such, financial institutions understandably feel the need for better solutions to manage contracts, a critical part of their business. There needs to be a proper focus on improving inefficient contract management processes and incorporating effective operating models. Lack of contract transparency
The vast contract processing environment overwhelms financial institutions. With hundreds of thousands of finance contracts spread across multiple systems, disparate systems and organizational silos reduce productivity. With so many loan agreements to manage, including bonds, mortgages, contracts, and settlements, organizations struggle to integrate systems and maintain data quality.
Complex Contract Lifecycle
Multiple contracts are involved in the financial services sector, often requiring the cooperation of multiple departments. Complexity makes it difficult to quickly identify anomalies in an environment of constantly changing laws and regulations. lose sight of the contract
Maintaining a software-readable and searchable data store was a significant challenge. The traditional manual method of sifting, consolidating and archiving large volumes of documents is a slow, tedious and inefficient process.
Ineffective Reporting Process
Spreadsheet-based contract execution lacks robust mechanisms for regular monitoring, review, and mitigation when problems arise. This invariably causes contract reviews and renewals to go unnoticed and underreported.
Solution? Automate Contract Management!
Automating contract management should be a key focus for finance organizations for many reasons. From increased visibility into the number of ongoing contracts with vendors to proactive risk mitigation, the landscape of automated contract management is fundamentally redefining processes.
Thoroughly reviewing high-risk contracts to prevent fraud is critical. Unlike outdated tools that made it difficult for financial institutions to track contracts, it is now easier to spot anomalies and catch problems early.
Automated contract management provides companies with complete, accessible, and digitized contract data to make informed decisions. The system can automatically update and change thousands of existing contracts during their lifecycle. Facilitate regulatory compliance.
Paper filing systems highlight the weaknesses of contract management, while automated contract management software offers dynamic, configurable workflows. The advantage is that pre-approved templates provide consolidated and grouped templates based on different contract types, ensuring that all contract terms are included.
With no need to integrate third-party plugins or hard-to-maintain coding or scripts, automation makes it easy to create custom alerts and reminders when contracts are due for review or need to be renewed. Its state-of-the-art workflow helps banks organize and manage contracts so that they are informed of all information in a timely manner. This intuitive feature allows you to make changes at any time, simplifying and streamlining your study workflow. A centralized, searchable repository is another great advantage of automated contract management software. It provides a unified view of contracts, suppliers, and purchase history, making it easy for businesses to work with large volumes of contracts and templates.
Automation fosters collaboration across independent processes in financial institutions. Revenue and procurement departments can ensure that terms and clauses are dynamically created and contract templates are approved in a timely manner. Even when these disparate entities are involved, automation eliminates errors and enables procurement teams to close more deals and reduce time to revenue. Three Key Benefits of Contract Management Software for Financial Services
Improve Compliance and Reduce Risk
A strong and sound regulatory system is essential to good corporate governance for all financial institutions, including financial brokers, insurance companies, banks, credit unions and stockbrokers. Insurers need to pay policyholders immediately when needed, and banks need to ensure that both corporate and individual customers are satisfied with their services. Contract management is especially useful for managing sensitive customer information in a secure cloud environment. A simple search query can easily extract any kind of document.
Demolished facilities can present multiple challenges and slow down the contract management process at a snail’s pace. Also, contracts are costly if they are not properly executed and managed. According to World Commerce and Contracting, the average cost to manage a simple contract is $6,900, and more complex contracts can be as high as $49,000. A fully controlled and automated setup allows you to easily monitor your payments, increase your productivity and deliver on all your promises.
Communication is always an integral part of contract management. Once the contract is closed, effective communication within the organization becomes a lively process. You may have a contract manager who frequently works with stakeholders. It may seem like a no-brainer, but having the tools you need can improve your workflow and give you real-time visibility into contract status. Stakeholders can easily collaborate and share information securely.
Vakilsearch provides automated workflows for the end-to-end contract management process, accelerating supplier onboarding and effective collaboration. Financial firms can effectively manage deadlines, payment obligations, and contractual claims.