As we’ve emerged from the global pandemic, the Financial Services industry has experienced a lot of change. At the brink of endemicity, challenges continue to arise—as will new solutions. Today, some of the biggest issues revolve around the pandemic’s knock-on effects: on talent, the drive to modern technology, risk management and regulatory concerns, climate sustainability, and more.
According to Deloitte’s 2022 Financial Services Industry Outlooks¹, there are firms that are starting to separate themselves from the pack, either because they have been much more successful at implementing modern digital technologies, building stronger cultures, or locating, hiring, and retaining the right people to navigate a changing industry. And perhaps for the first time, employees have the upper hand.
Insurers are increasingly focused on emerging technologies and data sources to drive efficiency, enhance cybersecurity, and expand capabilities across the organization. We are witnessing digital and talent transformation accelerating as insurers adapt for post pandemic growth. Despite lingering concerns about COVID-19 variants, most insurers expect an accelerating economic recovery and to make additional digital technology investments in 2022.
Digital Transformation is a Competitive Advantage
Many financial services firms are still heavily reliant on Excel or legacy systems. This is challenging because they are: manual, time consuming, not transparent, error prone, not integrated with other business processes, lack automation, replication and uniformity, and lack security.
Although some have implemented applications, they are either on-premise or an older architecture. A few have made the move to the cloud.
How do you get started? It’s helpful to ask yourself these questions:
- Where are you today?
- Where are your competitors?
- What is the cost of inaction?
- Where do you want to be?
- How are you going to get there?
- Who can help you get there?
Oracle’s EPM Solution Addresses Top Concerns and More
Oracle Cloud Close and Consolidation is a fully integrated, cloud-based solution with an array of out-of-the-box and prebuilt functionality.
To address technology concerns, Oracle’s Close and Consolidation is an integrated solution that gives companies the technology to get ahead and separate themselves from their counterparts. It’s completely cloud-based so it supports a growing workforce who need to work from anywhere. Oracle spends billions in Cloud research and development to ensure it’s the most up to date, best-in-class solution.
Regarding risk and regulation, Oracle’s solution provides a systematic approach to the close which effectively reduces risk for errors and omissions. Additionally, there’s built-in artificial intelligence (AI), to assist the reconciliation process, and Oracle regularly provides software updates to satisfy and keep pace with the latest regulatory reporting requirements.
In the area of reporting, the Close and Consolidation solution leverages the fully integrated Narrative Reporting module that enables companies to include disclosures and commentary to support reporting requirements.
There are numerous native capabilities within the comprehensive financial close solution, including:
- Out-of-the-box statement frameworks:
- Balance Sheet
- Income Statement
- Cash Flow
- A flexible rules engine that allows for industry-specific metrics and KPIs
- Foreign Currency Translation capabilities
- Standard functional to reporting currency translation
- Historical rate processing (i.e. overrides)
- Custom translation for specific situations
- Extensive user-friendly consolidation features
- Standard intercompany eliminations
- Ownership processing
- Non-Controlling interest
- Joint Ventures
- Equity Pickup
- Ability to track by GAAP and Statutory results separately by book and track differences
- Track investment and other activity (i.e. rollforwards) on a detailed basis as part of the Cash Flow statement
- Manage monthly reporting and statutory filing cycles independently according to their respective timelines
- Comprehensive Account Reconciliation processing
- Balance comparisons
- Account Analysis
- Transaction Matching
- Collaborative Reporting
- Collate multiple formats, track progress, and perform review cycles
- Reporting feature sets which meet regulatory and management reporting requirements
Case Study Example of Close and Consolidation in Action
An insurance and financial services company sought to remediate a key control deficiency with out-of-the-box capabilities that simplified its business processes and created a controlled environment around its cash flow reporting needs.
With Oracle Financial Consolidation & Close, the company was able to:
- Remediate control deficiencies by eliminating offline spreadsheets and transparency to the source of line items in the Statement of Cash Flow
- Automate processes that support the cash flow statement, including capturing non-cash items and tracking investment portfolio activity by asset class
Top Customer Objectives and Challenges
- Create controls around the capturing of non-cash and balance sheet movements in the creation of the US GAAP Statement of Cash Flows
- Reduce dependencies on Excel and end users to perform heavily manual processes
Benefits Achieved
- Enhanced control environment through automation of a manually intensive process including elimination of existing templates.
- Elimination of “Monitored Control Deficiency” related to the inability to properly identify and record non-cash transactions
- Integration of workflow and audit trail for adjustments within cash flow preparation
- Allowed the external reporting team to have more time to analyze results rather than performing the process.
For the company, the solution provided a simplified process to facilitate the adjustments for “non-cash” transactions, provided end-users with the ability to directly enter an ad-hoc “non-cash” transaction adjustment directly into the solution, and provided automated analysis of cash flow to evaluate integrity.
Learn more about the solution in action at this company, as well as more real-life examples of companies that have implemented an Oracle Cloud EPM Financial Close and Consolidation solution and the results and benefits by listening to our webinar.
For comments, questions, or suggestions for future topics, please reach out to us at infosolutions@alithya.com. Visit our blog regularly for new posts about Cloud updates and other Oracle Cloud Services such as Planning and Budgeting, Financial Consolidation, Account Reconciliation, and Enterprise Data Management. Follow Alithya on social media for the latest information about EPM, ERP, HCM, and Analytics solutions to meet your business need.