The machines are coming. Whether we like it or not, Artificial Intelligence is changing the way we live, from our homes to our computers, and from our medical treatment to the way our taxes are processed.
Alexa, Amazon’s digital assistant, will respond to voice commands to play music, control your smart home, get information, news and weather, while Apple’s Siri and Google’s Assistant respond to prompts and commands. Retail banks are now using AI to lead customers through common scenarios, such as what to do when they lose their debit card.
Although we might enjoy the benefits of AI in making our personal lives easier, there is a greater general suspicion around how AI might change the way we work, replacing and automating many of the jobs which are now done by people.
This has huge implications for the accountancy profession. A much-cited study of 2013 by Oxford University listed accountants and auditors as two of the professions most likely to be affected by AI. A report in 2016 by McKinsey predicted that 86% of tasks done by bookkeepers, accountants, and auditing clerks could potentially be automated.
UBS, the global finance group, says $11 billion has been invested into artificial intelligence since 2010 and that figure is set to rise to more than $47 billion by 2020.
The future is now
“People are talking about the Oxford University statistic but not really acting on it,” says James Poyser, CEO of inniAccounts, a cloud based accounting service with accountants on hand to help provide advice.
“They think it might happen in 2020 or 2040, but it has arrived a lot sooner than people thought.
“Any accountancy practice is going to be out of business unless they add value because AI will make compliance work a commodity product. Unless you are adding value, you are not going to be in business.”
Advances in machine learning and data processing will make a big difference to professionals like finance and accountancy because they speed up processes and enable customers to ask questions and get information via chat bots. AI already has the capacity to take on complex tasks which used to be done by humans.
“Digital takes no prisoners,” says Dr Linda Holbeche, an international consultant, developer and author in the fields of HR, leadership, strategy and change and author of The Agile Organsation. “It has crept into the most highly skilled professions – medicine, law, accountancy.”
She said organisations needed to be more proactive and seek opportunities while at the same time doing their best to mitigate risk if they wanted to still being doing business in the future.
A new, smarter type of software
The UBS report – A new dawn – the evolution of artificial intelligence says around 2,000 start-ups globally now have AI as a core part of their business model.
Artificial intelligence can be understood as a set of tools and programs that makes software “smarter” in a way an outside observer thinks the output is generated by a human, it says.
“The main business advantages of AI over human intelligence are its high scalability, resulting in significant cost savings,” the report says. “Other benefits include AI’s consistency and rule-based programs, which eventually reduce errors (both omission and commission), AI’s longevity coupled with continuous improvements and its ability to document processes – some of the few reasons why AI is drawing wide interest.”
AI’s industry growth will start to “explode” over the next four years and is posed to replace tasks, not jobs.
“By automating tasks that rely on analyses, subtle judgments and problem solving, AI can be a threat to low-skill, predictable and routine jobs in industries like retail and financial services.”
The human touch
One of the advantages of AI, and the reason it is being adopted quickly, is that upgrading your processes can done with relatively inexpensive software, says James Poyser.
“AI is now becoming a commodity,” he says. “I can sit here in my home office and start using AI and training it to help me in my work. I don’t need to make a big investment in a major system overhaul.”
He says a huge amount of accountancy is compliance, and that is where AI is better and cheaper than humans. The industry has to wake up to the shift to the way business is done, or accountancy practices will fold as a consequence.
AI is already able to automate time consuming tasks such as data entry and reviewing documents manually, says Lee Owen, Senior Business Director, Hays Accountancy & Finance.
For accounting firms who take advantage of AI will mean they are able to analyse significant amounts of data more quickly, and deliver more analysis and insight to their clients when they require it.
“With this in mind data analysis skills will become more sought after,” he says. “Accountants will be expected to convey more in depth analysis to clients and internal stakeholders.
“As technology moves at a quicker pace, employers are looking for candidates who make every effort to stay curious in their role and are constantly seeking to learn about the emerging trends in their industry and the role that technology has to play in this.”
Any accountancy practice is going to be out of business unless they add value because AI will make compliance work a commodity product
A new skill set
Some of the roadblocks are about people resisting change, Dr Linda Holbeche says.
“The obstacles are not out there, they are inside. People don’t want to give up what they have.”
James Poyser thinks that change is essential. In the next ten years there will be market consolidation and a new breed of accountant will emerge – one that has technology at the heart of the business model and is skilled at consultancy and strategy as well as doing the numbers.
“Our business is changing. Everything we do is customer focused,” he says. “We have a customer service team who work on figuring out what our customers want. The impact of AI is that for accountants, having numerical ability is not enough. Clients are looking for advice, communication, strategies for businesses.”
The changes are already here. In his own business he recently advertised for an entry level position that asked for different skills from what was required in a trainee accountant five years ago.
“We are having to rewrite the job ad. Five years ago we would have asked for numerical skills – now we are looking for someone who can be customer focussed and learning ability
“I am looking to recruit from the retail and hospitality industry where staff have great inter-personal skills.
“Today’s accountants need emotional intelligence. It is easier to teach someone with great people skills to be an accountant than teaching emotional intelligence to someone who is good with numbers.”
He cites processes such as compiling and checking quarterly VAT returns as something machines can do more quickly and efficiently that humans.
“AI can scan through the transactions that are entered into the software and recognise a train ticket and put it into the right category. The software is much faster than a person would be, and less likely to make mistakes.”
Owen says that as technology frees up time for accountants, soft skills like communication will become even more important as a result.
“Commercial awareness is perhaps the most crucial non-technical skill an accountant can have,” he says. “Finance leaders regularly tell us that commercial awareness is a critical skill for an organisation’s future. You can develop this by arming yourself with an understanding of how your organisation operates and how your role relates to overall business goals.”
One advantage for young accountants coming into the profession is that they are naturally more tech savvy.
“The new breed of accountant will likely need to be proficient in data analysis, business intelligence and cloud computing as well as being well aware of what technology could change the profession further in the future,” he says.
The fourth industrial revolution
Technology is changing our personal lives and shaping the way we do business, and organisations need to be able to adapt to this challenge, says Danny Taggart, Director of Deloitte Global Workforce.
Deloitte’s Human Capital Trends interviewed 11,000 people in 124 countries and looked at technology and how it was affecting individuals and businesses. It concluded that change is happening at a greater rate than people can cope with and businesses are slow at incorporating digital technologies into the workplace.
He describes the digital advance as the “4th industrial revolution” and says technological change is having an unforeseen impact on society and it creates a massive opportunity to achieve inclusive growth.
Andrew Robb, partner Global Mobility Talent and Reward at Deloitte, explains that in an increasing digital age, the differentiating factors will be the empathetic qualities, the human touch that AI, technology and machines cannot provide.
The good news for accountants is that human beings are still better at consultancy, emotional intelligence, business strategy, support and mentoring than computer algorithms.
“Overall accounting roles are likely to move more towards the business partnering model by expanding accountant’s roles to provide critical insight and business intelligence,” says Owen.
“Accountants will be able to provide support and analysis, becoming trusted advisors and adding value.”
Going forward, the key to survival and success will be to deepen interpersonal skills in order to add value to the relationships with clients. While numerical accuracy and a quick mind will always be essentials in the profession, being able to understand, engage and relate to clients will become just as important.
“Whilst robots and AI may have the potential to add speed and efficiency to the profession, ultimately it will still be human accountants who will add the commercial nous and insight that the smartest of technologies cannot rival,” he says.
Emotional intelligence will become even more essential to organisations who want to automate some of their services whilst maintaining strong human relationships between customers and colleagues.
How to future-proof your career
For the next generation of accountants and for accountants currently working it’s important to prioritise your own development to keep up with the changing needs of the industry.
“Whilst technology may be affecting the way accountants work, accountants shouldn’t be afraid of the change and instead embrace the opportunities it may bring,” Owen says. For example, you can find out which upcoming technologies finance departments in other organisations are implementing by asking other connections you meet at industry events.
Regularly attending institute and other commercial events will prove really useful.
“Accountants are no longer expected to quietly work through spreadsheets, and it is those who have acute business acumen and who are ready to harness digital developments that will champion the future of accountancy.”
Marianne Curphey is an award-winning financial writer and columnist, and author of the book How Money Works. She worked as City Editor at The Guardian, deputy editor of Guardian online, and has worked for The Times, Telegraph and BBC.