The Chartered Institute of Management Accountants (Cima) has emphasised the need for finance professionals to embrace digital technology.
This was highlighted during a Future of Finance discussion, hosted by Cima on Wednesday, which explored how finance is being redefined in terms of a digital world and the perceived disruption from automation.
The finance industry, as with other industries, is constantly evolving and has to contend with rapid digitisation. It is also being influenced by robotics and artificial intelligence (AI).
As the Fourth Industrial Revolution plays out, technologies such as robotics, AI and computer algorithms are taking over basic routine functions and providing companies with more information and data on their customers.
Companies need to be able to discern how to use financial and nonfinancial information in an accurate and holistic way to drive their strategy and be forward thinking.
This will open up opportunities for finance professionals to redefine their roles as business partners and value creators.
Research conducted by Cima has revealed that there is an immediate need to take on new competencies. It stated that businesses are being redefined by the A to E of finance – automation, blockchain, cybersecurity, data analytics and everything else that surrounds them.
Over the course of 18 months, Cima consulted finance professionals from over 2 000 public and private organisations in 150 countries to understand and build a composite picture of the role finance professionals play in business, identify competencies and skills employers expect and map how these are changing in a digital world.
The research indicated that 61% of finance professionals surveyed expected more than 20% of finance tasks to be automated in the next three years; and more than 55% have already seen a move towards “somewhat” automated processes.
“To thrive in our new digital era, finance professionals need to be taught digital intelligence to understand how to leverage technology to create value for the business,” said Cima Africa acting regional VP Dr Sara Bux.
Within a company’s finance function, accounting roles are considered to be at considerable risk of automation. Historically, much of the work has involved the gathering, preparation and processing of financial data, which is labour intensive, repetitive and time consuming.
Therefore, this made understanding and using automation an essential skill for finance professionals to operate in an increasingly digital and agile environment, Finance Transformation Research and Development associate director Peter Simons noted.
This is the age of computer-enabled automation. For example, robotic process automation is used extensively in reconciling costs across business departments, which allows for the relevant data to be captured from these disparate sources without the need for employee intervention.
Such mediums considerably reduce time and costs, while also improving the accuracy of data.
One technology company’s automated process generated forecasts in four work days a year as opposed to 16 000 hours when tackled manually.
Meanwhile, this raises questions about whether the evolution of finance constitutes a threat to the livelihoods of finance professionals.
Cima research shows, however, that there is an opportunity for robots and humans to work together to achieve a common goal by streamlining processes. Robots can be part of an integrated workforce, working alongside people to take over relatively simple tasks and enable people to spend time on higher-value activities.
Association of International Certified Professional Accountants management accounting CE Andrew Harding commented that the workforce would change and workers would need to learn new skills and adjust their manner of learning – rather than learning one defined skill set, it would be a lifelong, ever-changing, perpetual process of unlearning, learning and relearning.
He emphasised that the survey indicated that technology is important, but that people are more important in the world of work – that is, as technology advances, the impact people can have on their work is enhanced.
Simons reiterated this, noting that the changes technological advancement engendered in finance allowed more free time for finance professionals to be more productive.
This changes the manner of working, with an emphasis on workers adding value to the organisation, rather than a set outcome.
The changing environment represents an opportunity for organisations to embrace emerging technologies to deliver value across their organisations.
Finance professionals’ focus should be on areas where machines and humans can work alongside each other or complement each other, such as programming and oversight, as well as areas where humans are irreplaceable, those requiring empathy, creativity, discretionary judgment and leadership.
Rapidly advancing technology will, therefore, not negate the need for finance professionals. Rather, those who embrace technology, develop the appropriate skills, are open to change and willing to adapt, can focus on adding value to the business and capitalise on the wave of innovation.
Cima, celebrating its centenary this year, is the world’s largest professional body of management accountants with 237 000 members and students.