Automation and the future of finance 

6 July 2022  |  11 minutes read

While technology has led to full-scale revolutions in manufacturing and retail, the impact that technology will have on finance is only just becoming clear. As the pace of change quickens and new technologies emerge, we examine the future of finance. From the work finance teams do and their function within organisations to the role of the CFO, technology is set to disrupt finance from top to bottom. 

The traditional role of finance

Historically, finance teams have been more focused on data processing, reporting, and compliance. Tasks such as preparing data, outlining historical performance, and reconciling accounts had to be done manually, so large amounts of resource were required.

As there was little time left for in-depth insights and action, other functions may have viewed finance teams as isolated or focused only on number crunching. Without automation, individuals were bogged down in time-consuming low-value tasks, like transferring data between incompatible systems. This has meant that finance teams have never been able to fully realise their potential within organisations.

“We need to move away from data entry and…provide more value and guidance to the business…Be a pro partner with other departments instead of still having to manually do these tasks.”
Long Dinh, VP of Finance at Ada

The difference automation makes

When the burden of manual processes is removed, large numbers of staff aren’t required to complete basic processes. Everything can be done automatically in just a few clicks. Processes are more efficient, and individuals are freed up to focus on more useful tasks like data analysis or forecasting.

The data they are using also becomes more accurate and more reliable when there’s no chance of manual data entry errors. This means more precise predictions. And because the data is richer, decision-making is better too.

While custom spreadsheets make visualisation and analytics more difficult, automated systems make reporting quick and easy – and automation means it can be done more often. Instead of limiting reporting to monthly or quarterly intervals due to resource constraints, it can be done in real-time so teams have an accurate view of performance, always.

And, as tech evolves, it can take over more and more of this type of data management. (For example, algorithms can be used to generate basic forecasting automatically.)

“[I look to automate] any kind of reporting mechanism. You, your time and energy should be more spent on analysing those reports rather than making those reports.”
Rahul Goel, VP of Finance at Moglix

Technology’s full potential

While the benefits of automation are becoming more widely understood, the full potential of technology has yet to be fully realised. For instance, DLT (distributed ledger technology), like blockchain-based finance, allows data to be recorded or shared by different parties at the same time. It has the capacity to unlock real-time transactions and data integrations.

Decentralising finance in this way could remove the need for banks, shifting power to the end user. This could completely transform what finance teams do, and how they do it. This is the case not just for DLT, but for many leading-edge technologies now emerging.

AI and machine learning are set to make forecasting more accurate and streamlined, offering better predictions and an enhanced view of risk. Cloud computing, on the other hand, has the capacity to unlock more processing power and increase cyber security for businesses.

Ever-increasing computing and network speeds will allow finance professionals to manage more and more data, helping them to make sense of more complex systems. And it doesn’t stop there. The potential of even more technologies, from robotics and language processing, will also need to be understood and harnessed.

New technology is also set to disrupt how businesses interact with their customers. With more customer data available and better ways to process and analyse this, companies will be able to identify problems in the purchase journey or predict the next big trend.

And we are only seeing the beginning of what virtual assistants could do for customer experience. Chatbots (and other conversational-UI tools) have become more widespread, covering common customer questions and problems, leaving service reps to focus on the more in-depth issues that need the human touch.

What this means for the finance function

Although technology has long been reported as a risk to jobs, it is too simplistic to say that robots will completely replace finance professionals. Instead, Soldo predicts that tech will supercharge some roles while it takes over from others.

Processing jobs will likely be lost to technology, as data handling can be done faster and more accurately by computers. But, as automation unlocks more accurate data and quicker reporting, analysts and data specialists will be increasingly in demand. For these experts, technology is not a threat, but a fuel.

This shift will also change the shape of finance hierarchies: instead of a large number of processors churning out data for a few analysts, only a few people will be needed to deliver high-quality, automated data – while more staff are needed to make sense of this information.

Analysts will need to get used to agile working, and what they work on (or who they work with) could change project by project or sprint by sprint, depending on the needs of the business. Individuals will need to flexible and comfortable with frequent change.

With better-quality information available, accounts payable staff and financial controllers will be able to do more within their roles. Rather than repetitive or tedious tasks, there will be more engaging reporting, forecasting, and planning.

When their calendars aren’t monopolised by unnecessary admin, employees will be able to use their time to attend training courses or seek out mentoring. The overall experience will improve, which will boost staff retention, and allow finance leaders to attract the best new candidates. And with vacancies at a record high following the COVID-19 pandemic, this is becoming an ever-more important concern for finance leaders.

This pivot will appeal to many, and top talent will make the most of the opportunity. The best employees with seek to upskill themselves and stay abreast of change.

Mastering core accounting functions will no longer be enough. They’ll also have to understand new technologies and let go of traditional ways of thinking. They’ll need a new mindset focused on continual learning, problem-solving, and cross-functional working. Some will find this easier than others, so finance leaders will need to work hard to support and train their staff through periods of significant upheaval.

“It should be a mindset for everyone in the finance function to say, today I go to work to create value, to drive some new information that someone can use to make better decisions.”
Anders Liu-Lindberg, Co-founder, CMO and COO, Business Partnering Institute

From a team working in isolation and concerned with traditional accountancy, this newly transformed finance team will be able to take on a more strategic position as a forward-thinking partner to the business.

They’ll lead on data stewardship and forecasting, to shape and support key business decisions, becoming a catalyst, focused on new ideas and company growth. And they’ll be uniquely positioned to take a business-wide view, to identify opportunities and risks, and influence real change.

“The role of finance or the CFO can evolve from…just reporting history, reporting business results to actually helping drive…better future results. So, moving from the stereotypical bean counter. Or the kind of reactive purveyor of rigid processes and too much data to actually help drive business results. To be a business partner, a true strategic business partner, proactive bringing to bear real time information and analytics, flexible processes.” Kelly Battles, Acting CFO, Alpha Medical

What this means for finance leaders

The pace of change is quickening, so CFOs will need to get comfortable with this, fast. If they can master new technologies, they’ll see their role within the C-suite change.

Thanks to the deep insights, high-quality data, and informed forecasting that technology unlocks, they’ll become known for thought leadership and long-term business strategy. No longer seen as simple accountants or reporters of retrospective results, we predict that top CFOs will take on more influential, generalist roles.

And they’ll increasingly be viewed as future-focused change agents with a broad scope, multiple capabilities, and expansive vision.

 “We have a framework that we call the four faces of the CFO, which includes being a strategist, a catalyst, an operator, and a steward.” Steve Gallucci, Global & US CFO Program Leader, Deloitte

As automation transforms finance roles, the shape of the finance team, and the place finance occupies within their organisations, finance leaders will need to get the right people in place to manage this transition. Accounting skills will no longer be enough. Instead, leaders will need to find candidates with future-focused skills like agility, imagination, and the ability to work cross-functionally.

CFOs will need to become more concerned with acquiring, retaining, and developing top financial talent. And will need to work hard to upskill teams, ready for new challenges. This will include ingraining a self-starting mindset, focusing individuals on problem solving and collaboration, and inspire an entrepreneurial spirit in every one of their employees. Succession planning will also be high up on the agenda.

“It should be a mindset for everyone in the finance function to say, today I go to work to create value, to drive some new information that someone can use to make better decisions.” Anders Liu-Lindberg, Co-founder, CMO and COO, Business Partnering Institute

The future of finance

With technology set to revolutionise what finance professionals do and how they do it, CFOs can’t afford to sit back. Now’s the time to get ahead of this major shake-up. That means getting to grips with emerging technologies including automation, upskilling teams in preparation for change, and laying the foundations for a transformed finance function within organisations.

“That is a key part of the future of finance, that we are there at the table, not just reporting numbers. We’re contributing with business insights, making recommendations. Strategic tactical, whatever it might be about how to move the company forward, realize the strategy, create value. That’s the future of finance.” Anders Liu-Lindberg, Co-founder, CMO and COO, Business Partnering Institute

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