Future of finance hinges on understanding of data
It is being discussed in the corridors that the accounting or finance profession is going to be most impacted in the era of artificial intelligence and machine learning. We also know that the global job markets are likely to take a 360 degree shift with the advent of data driven economy.
Some opine finance professions will change, at the same time will reinvent itself with the help of technology driven solutions building.
Global professional firm PwC along with ACCA came up with an interesting report titled “Finance: a journey to the future?” This report explores the world of finance in the future, given the technological changes happening today. It further shows how people who intend to embark and be successful in their journey towards change will be impacted.
Creating the space to think more broadly about the needs of the business and financial operation in the future is essential. Skills, process, culture, technology and data are the five dimensions identified in this report underlying the evolution of finance.
The report was prepared with the aid of workshops, interviews and surveys conducted cooperatively by ACCA and PwC in a range of industries and geographies such as the United Kingdom, Republic of Ireland, China and more with senior professionals and those who have close involvement in developing the finance function strategy of tomorrow.
Six hypotheses were created from the 1,100 responses received in the study. These hypotheses represent the collective opinions that were expressed in initial conversations and were used to question and authenticate the likely comprehension of these future visions.
The outcome of the study shows various upcoming changes in the world of finance. Firstly, it was found that the impact of technological progress is different in China and Western European economies. For instance, China emphases on aggregation of enterprises around technology rather than directly by disruptive entrants into the market.
Moreover, an interesting find was that developed economies such as the UK appeared less open to change with a conservative outlook as opposed to economies like China representing a progressive attitude.
The biggest barrier discovered was the change in mindset in leadership of the role of finance. The participants thought that this is may be due to the different perceptions of different generations.
Moreover, it was also found that there is a need to focus on the insight’s agenda and access to information: both internally and externally.
The respondents believe that technological knowledge is key to establishing the future capability of finance. Technology is also not only about cost but also about how it can assist you to add value to the business.
Moreover, regarding job loss due to technological changes which is one of the biggest fears when we think about an automated future, the contributors said that the headcount reduction is a by-product of tech, not the goal.
Furthermore, the participants suggested that organisations reduce their transaction processing activities using tech by optimising processes. Lastly, the study also found that there is a need to rethink traditional cycles, which is often based on historic labour-intensive methods and non-integrated systems and substitute them with agile real time processes.
The utmost emphasis among finance specialists in the future will be understanding the data, playing a dynamic role in decision-making at the top. It is believed that the most concerning threat to finance professionals is the threat to grasp opportunities in a different way. They will have very little effect on defining the course of the finance function and their part within it.
However, utilising technology such as machine learning to improve forecasting abilities will allow the finance professionals to continue to play an important role in the decision-making.
There was great emphasis put onto the importance of ‘leadership’ in the report. To reach the true potential, strong leadership is essential in finance to realise the need to evolve from the traditional methods to a more robust and efficient system.
A future-focused finance team must have top down sponsorship, alignment with purpose, empowered change teams and advance to a collaborative environment whilst embracing frequent change naturally.
Lastly, this development requires broadening the skills base and the finance community of tomorrow must encourage deep and relevant knowledge across the firm. No doubt technology will play a decisive role here.
The writer is a partner at PwC. This article is the excerpt of a dialogue on “The business partner of the future” jointly organised by ACCA, PwC and The Daily Star.
