By Christian Müller, Chief Financial Officer at Moss
The rhetoric of digital transformation has been growing in urgency since the turn of the millennium, and the financial services and accounting sectors have found themselves slow to catch up, despite a positive start. The growing role of SMEs in economies across the globe has increased the bureaucratic burden, whilst larger companies have found themselves hiring as many IT staff as they are bankers, accountants and advisers. SMEs now represent about 90% of businesses and more than 50% of employment worldwide according to the World Bank, and it’s estimated that 600 million jobs will be needed by 2030 to absorb the growing global workforce.
We are starting to see job roles require a convergence of skill sets that were once held to be separate, with digital dexterity becoming a top priority, or even simply table stakes, for all employers in finance and accounting. Not only this, but the need for digital skills across every industry is increasing competition for new hires. Although it’s a lucrative market for potential employees, the industry is struggling to cope. Despite initiatives to get staff up to speed, the desired skill sets are now more fluid. Employees not only need entry-level training, but are required to keep pace with the rate of technological change as well.
Unfortunately, the UK government has reported that financial services have one of the lowest rates of investment in employee learning and development, which is contributing to the widening skills gap.
The good news is that it isn’t all doom and gloom for finance and accounting – in the face of immense uncertainty during the pandemic, the clouds began to part. The whole world was shocked by the strength with which our digital ecosystem held up during the outbreak of coronavirus in 2020, when the number of people working from home more than doubled to 8.4 million according to the Office for National Statistics, with some of the largest banking groups including JP Morgan leading the charge on office closures.
Since then, we have seen the rate of innovation skyrocket, with new technological solutions coming to market at a rapid pace to help ease the burden of the digital skills gap. New solutions driven by artificial intelligence (AI) that make the most of the finance and accounting industry’s previously underutilised pools of data are powering-up automation, delivering critical insights, and helping predict new trends and industry patterns. All this is helping firms to streamline their operations and free-up staff to focus on delivering better customer service, backed by data and an array of tools at their disposal.
New technology for new challenges
As customer expectations have changed, the need for new, agile solutions has become paramount for success. The use cases for AI-driven tech are endless, and we’re just beginning to scratch the surface on what it can deliver for finance and accounting. The tech can deliver on invoice management, reimbursements, cash flow insights, and automated accounting to help businesses streamline their internal operations and focus on their growth strategies. Not to mention the benefit of making life easier for their accountants. Tedious document collection, cost allocation, receipt entry, and more can be reduced to a number of clicks, whilst finance teams can now easily manage all corporate expenses centrally in one place. By having a centralised platform, accountants and finance teams can have full visibility of transactions and expenses, so getting to the bottom of invoicing mysteries has never been easier.
On top of this, technology has powered an Open Banking revolution, which has opened the doors for new conversations around utilising financial data for greater innovation efforts. Time-saving is being powered by the digitalisation of taxation, which is making it easier for businesses to eliminate common errors and save time managing their tax affairs. The use of technology to support auditing reforms is also helping firms stay on top of compliance and bring in new customers.
It is a truly exciting time for financial services and accounting. However firms must get on board with the culture of digitalisation and open themselves up to trialling new solutions. Of course, this also requires a willingness to set aside more budget for bringing new capabilities to the business, but the rewards are becoming harder and harder to ignore. Those that dig their heels in will only find themselves further behind the curve, whilst the champions of this new era in finance and accounting will be those who onboard tailored solutions that compliment the needs of their workforce.
Now is the time to retire legacy systems and look at investing in agile solutions that can evolve to keep up with new business and customer demands. This is not only going to improve the day-to-day experience, but it helps to better prepare the industry for future unpredictable events – a lesson well learned over the last few years.