Data automation Has become ever more important for financial services institutions. What is driving this increased focus?
The financial services industry is incredibly competitive and is also one of the most heavily regulated industries. Faced with a unique set of challenges and opportunities, financial institutions are increasingly going beyond leveraging data automation to help them to address operational efficiencies and stay compliant, towards a more strategic view of leveraging data automation to stay competitive.
Financial institutions grapple with ever-increasing data volumes and complexity. From the client onboarding process to contracts, trade confirmations and balance sheets and more, there is a huge number of data touchpoints, with data coming from thousands of different systems, and further compounded by its variety and complexity. A report from IDC states that 90 per cent of enterprise data is unstructured. In order to derive meaningful insights, financial institutions require data automation technologies that leverage advanced technologies such as natural language processing, artificial intelligence and machine learning.
Additionally, the financial services industry faces ever-evolving regulations, from German tax e-filing and EU FASTER to the UK’s forthcoming shift to T+1 by the end of 2027. The ever-evolving regulations require firms to embrace automation to navigate costly and time-consuming processes, and to remain ahead of regulations. Data automation is key to achieving this, enabling institutions to implement systems that adapt in real-time to regulations, providing operational continuity and compliance, even as changes take place.
Data automation is also increasingly critical in identifying and managing operational risks, such as fraud detection. These tools can provide real-time monitoring and predictive analytics to mitigate risks.
Another factor is operational inefficiency stemming from disparate tools and workflows. As a result, gaps form between the different systems and processes, leading to siloed data, an increased need for human intervention, increased risks of human errors, and tasks take longer to complete. Automating end-to-end operational processes has the power to transform unstructured data into streamlined workflows.
There are clear benefits for middle and back office functions with data automation. How are financial services institutions leveraging data automation for strategic value and competitive advantage?
Indeed, many of our clients are reaping efficiency gains from data automation in middle and back office functions. Data automation tools, such as the Xceptor platform, help automate and accelerate end-to-end operational processes across confirmations, reconciliations, end-user computing (EUC) remediation, tax operations, and more. This allows for enhanced operational efficiency, real-time decision making and regulatory compliance. Additionally, what we are seeing is that clients can unlock further value and competitive advantage by taking a more strategic and broader view, allowing them to achieve scalability and flexibility as well as deliver on improved customer experience.
Schroders, for example, had initially appointed Xceptor to process incoming transfer agency cashflows into Blackrock’s Aladdin. This included checking and validating the cashflows with predictions, and once confirmed, to be loaded in Aladdin. Following the successful execution, Schroders expanded usage across their operations. With Xceptor, Schroders now runs 100 per cent of its externally-sourced data on its processing system, eliminating the need for multiple applications, many of which previously performed similar activities. This has allowed Schroders to eliminate risks associated with manual data input and bring uniformity to processes, as well as enhance further operational resilience and efficiency.
Another example is in what we have been able to achieve together with Catalyst, a global fund administrator and financial services firm. As the firm grew, so too did their manual processes for data extraction and processing. Catalyst implemented Xceptor as a solution to automate data extraction, transformation, and reconciliation processes, and saw results in their reconciliation processes within weeks, saving over 20 hours daily, and ultimately, a 125 per cent return on investment (ROI). Anecdotally, Catalyst has also indicated that job satisfaction amongst the team has been boosted, and senior team members are now freed up to focus on improving client service and value add activities.
Data automation tools are critical across the full financial services client lifecycle, and particularly so during the onboarding process, which is one of the most strategic and important points. Unfortunately, manual processes and disparate systems often make the client onboarding process a time-consuming and frustrating process. Data automation platforms can help to manage the complex process. For example, data automation tools provide real-time validation to ensure clients’ data is accurate from the start, reducing errors throughout the onboarding journey, and can process unstructured documents, including handwritten text and paper documents, to speed the onboarding process. Xceptor has helped many clients enhance their client onboarding process, reducing onboarding time from six weeks to just six days, and cutting account opening times by half — ultimately helping clients increase revenue through operational efficiencies.
Financial institutions like Catalyst and Schroders are embracing data automation as a crucial differentiator to gain a decisive edge through increased efficiency and accuracy across their workflows. Data automation can help institutions save time and money, as well as deliver a superior customer experience and deliver effectively on business goals.
Implementation projects are often fraught with challenges. What are the keys to success?
Across the successful client case studies we have, a few key success factors stand out. First, ensuring that products and solutions that are purpose-built for financial services can be hugely beneficial. As opposed to generic software, purpose-built solutions address specific pre and post-trade processes that clients require, meet the unique data requirements as well as specific regulatory landscape. All these can aid in ensuring smoother integration and delivery of desired outcomes.
Having the right team to support the client’s success is also crucial. One of the key pieces of client feedback we hear regularly is to have a team with relevant industry experience and expertise. From sales managers to delivery consultants to customer success managers, clients appreciate having individuals on the team who deeply understand the nuances of their processes, pain points and challenges.
Additionally, having a robust training and certification programme is key. For example, Xceptor clients have access to ‘Xceptor Connect’, which includes a plethora of training and enablement programmes (self-paced and instructor-led), professional certification, a sandbox environment, as well as a community to bounce ideas off of. This ensures that users are prepared for success, maximises adoption, and ultimately drives a successful implementation.
What have the past few years been like, and what does the future hold for Xceptor?
Since Xceptor was founded in 2003, our ethos has remained the same — empowering business users with trusted data.
We are deeply committed to providing tools and solutions that empower our users to solve for complex data automation scenarios and ultimately focus on what matters most.
In the past financial year, we continued to see double-digit growth, adding new clients as well as growing with many of our existing clients. Client success continues to be our north star that guides our go-to-market (GTM) strategy as well as our product innovation roadmap.
From a product perspective, we continue to focus and invest in innovation to solve for business challenges and deliver outcomes to financial services institutions. Building on our deep industry expertise and knowledge of business operations requirements, we have identified several key initiatives in our product roadmap, ranging from deepening existing capabilities in our offerings such as reconciliations, improving user experience, cloud-native deployments, to deeper AI adoption.
We also consulted with our client advisory board to ensure that the initiatives address critical client priorities and deliver tangible value.
An example is that of AI. While much of the industry was still exploring its potential, we delivered on AI capabilities, including an AI-powered document intelligence framework, along with a risk management and control framework. Clients can use powerful AI-based capabilities alongside our existing industry leading complex data and process orchestration capabilities to solve a broad set of use cases from loan notices to OTC trade confirmations, invoice management, etc.
Clients often tell us that our ability to have AI embedded into operations is particularly crucial in processing unstructured data, which has been a longstanding challenge in the industry.
From a GTM perspective, our continued growth has prompted us to broaden our market presence and enhance our service offerings to meet the evolving needs of our clients. We are honoured to have an enviable client roster — 14 of the top 50 global banks and seven of the top 10 global custodians. This not something we take lightly. We have grown our client-facing teams in North America, added coverage in EMEA and also continued to invest in APAC — so that we can continue to build strong relationships and deliver tailored solutions and services that address our clients’ needs.
Additionally, we have a strong ecosystem of partners that we will continue to build, nurture, and broaden.
Last year we announced our availability on the Microsoft Azure Marketplace, as well as a strategic alliance with KPMG to deliver tax solutions. These have been very well received and will continue to be a key component in how we best support our clients.
What trends do you expect to have an impact on the financial services industry this year?
AI has captivated business leaders for some time and will likely continue to do so, with the focus shifting from experimentation towards realising concrete value.
As this continues, an area where AI is poised to make its mark is in agentic AI, through the rise of orchestrated actions to automate smaller tasks within workflows. Today, agentic AI is not yet capable of managing entire workflows but has the potential to revolutionise data automation by enabling autonomous decision-making within workflows.
Additionally, we see tremendous potential in the integration of data automation and process discovery tools. This can empower institutions to proactively identify inefficiencies across the entire organisation that are ripe for automation and then expand automation efforts.
Various teams in Xceptor are currently actively working on specific initiatives, including several proof of concepts with our top clients and partners, to bring them from potential to reality.
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Reliant Fund Services
Eric Schultz
Image: Xceptor 
