‘FinTech’ ‘Big Data’ & ‘Artificial Intelligence’ - not exactly concepts, which are front of mind when thinking of traditional finance and accounting sectors, but as the digital disruption remoulds the way we think and do business, terms such as these are appearing more and more. While you’d be forgiven for not knowing what a ‘blockchain’ is, or how it works, members of the finance sector need to acquaint themselves with these emerging technologies if they are to move forward alongside the radically progressing financial world.
We’ve uncovered some emerging digital trends and concepts, highlighted what they mean and why embracing them is so important to the finance professionals of tomorrow, today.
‘Financial Technology’ refers to any system or technology used to enhance or automate financial services and processes. Despite becoming a buzzword in recent times, FinTech has always existed, in many different forms. Think of the Credit Card or ATM’s (or even the abacus) - while commonplace and somewhat unimpressive now, these technologies were huge innovations when they first entered the market, and completely changed the way the financial world operated. Many have touted the automation of the financial sector as the ‘death of the accountant’. It is important to remember however that these technologies can never completely replace human beings, but are rather there to improve the quality of service that we can provide to stakeholders.
Technology allows us to automate accounting processes and have them completed at a rate that was once impossible. Not only is it far more efficient, but the chance of human error is eliminated. Spending less time on tedious ledger entries and audits means that time is freed up for tasks, which the robots can’t do - strategic thinking, relationship management and client satisfaction. The elimination of costly errors, improved turnaround time and a greater focus on strategic, human thinking mean a win-win for firms that are able to harness the power of automation.
Data is power. Defined as ‘extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions.’ Software and analytical programs allow us to observe and draw from data pools, which would have otherwise been near impossible to sieve through manually in the past. This has led to a massive leap in the quality of forecasting based on trends and patterns, which are now clearly identifiable.
A concept which gained mainstream popularity with the Bit-Coin craze of the late 2010’s, Blockchain technology holds far more value to the world economy than the ‘snake-oil investment’ buzz it generated when it first emerged. It is a decentralised digital business transaction ledger that cannot be manipulated or altered. It also has the ability to process payments instantly, from anywhere in the world. This technology has the potential to remove paywalls, lead times and other inconveniences such as third-party bank fees, resulting in safe, encrypted payments that have global reach and are as instantaneous as an email. The Blockchain seems so effective that PWC predicts that over 70% of the financial services industry will transition towards embracing the technology by the end of 2021.
Advances in technologies and automation software are creating a shift in the role of the modern-day accountant, from a number-cruncher to a strategic thinker armed with a mass of useable data that can inform financial decision making like never before. The robots are indeed coming, but not in the way we once feared.