Dealflo’s CEO Abe Smith has been featured in this month’s Computer Business Review, discussing how financial services companies can learn from the mistakes of the past, and adopt a digital strategy to create legally enforceable agreements with their customers.
“$15 trillion a year in financial agreements still depend on manual or fragmented processes. They are inefficient, prone to human error and, often, legally unenforceable. They are, in short, a huge risk to businesses. Risks created by substandard agreement procedures, as well as those that include a human element, have contributed to the $204 billion that financial institutions have been fined since 2008 (CNBC). Events such as the PPI miss-selling scandal in the UK exposed a flaw in financial services companies’ procedures when dealing with customers: they lacked the evidence to prove that correct and compliant processes had been followed. When customers claimed that they had not seen or understood the terms and conditions of loans, regulators stated that the onus was on lenders to prove otherwise.”
The article offers a four step framework for financial services companies to reduce friction in their agreements process through an automated end-to-end process, whilst ensuring agreements created are fully enforceable if challenged.
“It is time for a complete overhaul of how financial agreements are managed. Large finance companies are starting to ask the right questions: how can they automate the whole process to reduce risk? How can they minimise reliance on humans to create watertight contracts? How can they protect themselves from challenges of mis-selling?”
You can read the full article here.