In the high-stakes world of financial operations, a new report confirms a familiar, frustrating reality: while the ambition for digital transformation is high, deep-rooted inefficiencies and stubborn manual processes continue to hamstring progress.
The research, commissioned by Xceptor in partnership with Crisil Coalition Greenwich, surveyed over 70 senior leaders across capital markets. While the focus was on banks and asset managers, the findings paint a picture that will be instantly recognizable to any corporate treasurer wrestling with legacy systems and data silos. The central takeaway? The desire for change is overwhelming, but the path to achieving it is riddled with roadblocks.
The Operational Efficiency Paradox
The drive for greater efficiency is no longer just a strategic goal; it is the primary engine of transformation. An overwhelming majority of leaders—nearly 90%—see digital transformation as essential to improving operational efficiency.
Yet, this ambition faces a stark internal reality. Fewer than one-third (28%) of respondents reported that these transformation initiatives are broadly supported within their organizations. Worse, one in ten indicated they receive no support at all, creating a significant disconnect between strategic goals and the resources allocated to achieve them.
“Despite several benefits of digital transformation to improve workflow efficiency, many participants are taking more time to invest in these resources and legacy practices prevail,” notes Audrey Costabile, Senior Analyst at Crisil Coalition Greenwich. She warns that the study “uncovers hard dollar costs to holding out on adoption, which are set to increase as data volumes continue to grow and market uncertainty persists.”
Drowning in Data, Blocked by Bottlenecks
At the heart of the issue is a fundamental data problem. Improving data capture and transformation is a top priority, but manual intervention continues to dominate the most critical processes. The research found that manual processes are still the norm for:
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Regulatory reporting (80%)
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Client onboarding (79%)
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Trade reconciliation (77%)
This reliance on manual work is exacerbated by a fragmented technology landscape. A staggering 95% of firms reported that no single platform can cover all their asset classes, forcing them to use up to five different systems. This inevitably leads to disjointed workflows, data silos, and time-consuming exception handling, with most issues taking hours—or even a full day—to resolve.
The financial bleed from this inefficiency is significant. Nearly 60% of respondents acknowledged the heavy burden of exception handling, with a similar number reporting the need to set aside up to 5% of their annual capital just to cover remediation costs.
“As trade volumes continue to rise and regulatory demands such as T+1 and the EU Faster Initiative intensify, firms are under pressure to modernize or risk falling behind,” says Michiel Verhoeven, CEO of Xceptor. “The Crisil Coalition Greenwich report confirms what we continue to witness firsthand in the industry: Getting data right through automation and AI is a top priority for all industry participants.”
The Cautious Embrace of AI
Artificial intelligence is widely seen as a potential solution. 60% of leaders view AI as important to their transformation strategy, citing its ability to automate manual tasks and free up employees for more strategic work.
However, adoption remains cautious and uneven. Currently, only one-third of firms report using AI. While another 43% plan to adopt it within the next two years, nearly a quarter (23%) have no plans to use AI at all. Key concerns around integration challenges and the need for stakeholder buy-in are tapping the brakes on broader implementation.
“AI has the potential to revolutionize how firms manage and transform data and workflows,” comments Dan Reid, CTO and Co-Founder of Xceptor. “To unlock this potential, adoption must be part of a strategic approach to data automation. Automating high-risk, manual processes can enable firms to reduce operational risk and improve regulatory compliance when implemented with effective controls in place.”
Ultimately, the report concludes that the race is on. In an environment of increasing pressure and complexity, firms that strategically address their core data and automation challenges are the ones best placed to accelerate their operations and build a lasting competitive advantage.
The full report is available for download at: https://www.xceptor.com/report/operational-efficiency-driving-digital-transformation-capital-markets