Getting on top of risk with smart workflow solutions

Financial institutions are dealing with a shifting risk paradigm. Taskize takes a deeper look at how intelligent workflow solutions could help firms overcome some of these issues.

Financial institutions, ranging from custodians and brokers right through to asset managers and asset owners, are facing some tough headwinds ahead.

Market volatility aside, many firms are battling fast-evolving operational and regulatory risks, whether that is cyber-crime or the rollout of T+1 settlements, and they are doing so with poor workflow communication tools and legacy technology stacks.

The adoption of smart workflow solutions could prove decisive here, as Taskize explains.

An industry with no shortage of risks

Fuelled by the prevailing geopolitical tensions, US trade tariffs, fears of an impending Artificial Intelligence (AI)-induced bubble, and the recent equity selloff, the current market uncertainty shows no sign of settling down. But wild market gyrations are not the only risk facing financial institutions – poor workflow practices are exposing organisations to all sorts of problems.

So, what exactly is going wrong?

Although offshoring has been embraced by the industry as a cost-cutting measure, it can sometimes exacerbate risk if it is done badly.

“Offshoring is not always effective. If financial institutions are outsourcing broken processes to cheaper locations, the pain-points are not being solved, and will get worse over time, increasing the likelihood of risks and errors creeping in,” notes James Pike, Chief Revenue Officer and Head of Strategy, Taskize.

“Historically, all of the key teams at financial institutions were located in one or two locations. As operations spread out across the globe, there was less connectivity between the core teams. With volumes mushrooming and operational processes becoming more complex, this dispersion means it has become much harder to solve business issues. This can lead to spiralling risks.”

These problems are further compounded by the industry’s lack of investment into workflow solutions, continued use of email, and siloed systems, which Pike argues is leading to data and information fragmentation – again, leading to more mistakes and risks.

Data security is a good example of where things can go wrong if workflows are not properly joined up. Data at global financial institutions is frequently stored in silos, whilst workflow streams will often involve input from multiple participants in various locations, each using their own bespoke systems and processes.

In such a fragmented operating environment – and with so many different threat vectors – the risk of suffering from cyber-attacks – and losing critical data – is high.

“Data security is a strategic priority for financial institutions, as the challenge of safeguarding client and proprietary information is becoming much harder, not least because the threats from sophisticated cyber criminals keep growing,” says Helen Adair, Chief Product Officer, Taskize.

Although geopolitics and trade tariffs were identified in a Depository Trust & Clearing Corporation (DTCC) survey as the biggest risk for financial institutions in 2026, cyber-crime was in second place, with 63% of respondents ranking it as a top 5 risk.

This comes as new technologies, such as AI, have increased the intensity of cyber-attacks and lowered the barriers to entry for would-be hackers.

Legacy technology is not helping matters either.

In some cases, providers are still using technology, such as COBOL, which is decades old, whereas others have simply patched up their systems by repeatedly building on top of legacy infrastructure. “If certain processes are being done manually or people are using antiquated systems, then this can create problems with transparency, increase the likelihood of errors, and leave organisations vulnerable to risks, and even losses,” highlights Adair.

Regulatory changes, such as the global transition to T+1, could also prove problematic for financial institutions if their workflows are found wanting, or if they are unable to wean themselves off legacy technology:

“A failure to automate ahead of T+1 will result in firms suffering from a spike in trade fails, possibly leading to added liquidity, credit and operational risk. This could result in firms incurring steep losses, haemorrhaging client business, and suffering reputational damage. It might also lead to stiff financial penalties for settlement indiscipline under the EU’s Central Securities Depositories Regulation (CSDR).”

Workflow as a risk-mitigator

Engaging with leading providers will be crucial in helping financial institutions keep risks in check.

Taskize has a well-trodden track record of delivering better automation at firms, allowing businesses to replace email and manual workflows with something more seamless and standardised. Not only does this reduce the chances of human errors at firms, but it simplifies operational processes, which ultimately translates into tangible risk benefits.

A single workflow platform and frictionless task allocation process means that the volume of escalated or incorrectly routed issues will fall dramatically, allowing for critical tasks to be solved more quickly. “Having everything in one place and visible to all participants in the chain makes it easier to solve problems, and prevents risks from escalating,” notes Adair.

This is echoed by James Pike: “As more urgent queries can be resolved in a prescribed time-frame and there are fewer escalations, the operational risk at firms is much reduced when leveraging Taskize. Equally, standardisation of workflows, enabled by the percentage categorisation of task complexity and the ability of firms to measure thresholds against capacity and performance, can also support risk mitigation.”

Financial institutions have a lot to gain from this.

Instead of relying on multiple workstreams, a consolidated workflow – with full audit trail – offers firms greater security, and with it – mitigates the risk of data leakage – accidental or otherwise.

It will also support firms with T+1 compliance, Helen Adair explains:

“The fundamental challenge of T+1 is the ability to achieve and maintain timely trade execution, with as few errors as possible in the front to back-office process. A full audit trail of transactions and processes will enable firms to reduce errors and risks once shorter settlement cycles bed down.”

The results speak for themselves. According to a Euroclear survey, 100% of respondents said they receive better alerts and notifications on Taskize, reducing the risk of missing critical updates.  A further 100% of respondents also noted that transparency is much improved on Taskize, meaning users benefit from having a reduced number of touchpoints and faster resolution times. 

Overall resolution times – when deploying Taskize – have fallen by 70% from 3.5 days to 1 day – again allowing clients to manage their risks much better.  

As risks continue to escalate, those firms with high-quality workflow solutions, will be the ones best positioned to navigate the bumpy road that lies ahead.