Accountants and AI: adapting to the digital future
Originally posted by Lachlan Colquhoun @ intheblack.com
Digital technologies such as artificial intelligence (AI) and blockchain would “cut out the middleman” in financial services, leaving the accountants of the future to focus less on compliance and more on strengthening relationships and delivering insights to clients, the World Congress of Accountants (WCOA) heard today.
What will accountants do when compliance work is taken away? CPA Australia policy adviser, reporting, Ram Subramanian asked a panel discussion “How is the changing digital landscape impacting your business?”
Subramanian asked the panel speakers how the future would look for accountants in a world where much of their compliance work would be performed through AI, robotic process automation (RPA), blockchain and other technologies.
“As accountants we have a challenge to enhance our profession,” he says.
“So much of what we do is compliance work, so what will we do when that is taken away?”
Blockchain cuts compliance work
Panel speaker James Evangelidis, author of the “What do Clients Really Want” series of books and podcasts, agreed that while blockchain technology would eliminate a significant amount of compliance work, it would help accountants but not replace them.
“I imagine that accountants want to do less compliance, not more,” he said.
“All blockchain will do will be to eliminate some roles and create others. The message is keep calm and don’t freak out, because it will make your job easier.”
Evangelidis said that blockchain based on distributed ledgers was on the cusp of changing business to the same extent as the internet in the late 1990s.
“Smarter Contracts” in transactions such as real estate purchases had the potential to eliminate banks, lawyers and real estate agents from the process, cutting time down to less than a week and costs from an estimated $30,000 per transaction to under $900.
He quoted the example of the World Bank, which in August 2018 used blockchain technology developed by the Commonwealth Bank to issue and price a A$100 million bond at only 5 per cent of the cost of a traditional manual bookbuild process.
For accountants, Evangelidis said blockchain would have a major impact on the taxation system and help boost compliance and eliminate fraud.
“If the Australian Government announced that they were moving the tax system onto blockchain, every transaction through an account would be tracked, compliance would be a whole lot easier and tax would be more straightforward and hard to avoid,” he said.
Fellow panellist Alan FitzGerald, a technology consultant to accountants through his firm PracticeConnections, disagreed with Evangelidis on the maturity of blockchain technology, which he believed was several years away from having a significant impact.
Rather, FitzGerald focussed on RPA and AI as technologies that would impact accountants and the finance functions of organisations much sooner.
This would be increasingly enabled by 5G mobile networks which would transmit larger volumes of data at much greater speeds than current 4G and 3G networks.
“RPA is automating what can be automated, so it is a dumb technology, but when you put AI on top of that it can read the information and perform tasks such as cross referencing papers in a tax return within thirty seconds,” said FitzGerald.
“RPA is the brawn, and AI is the brains.”
Accountants as anxiety transfer experts
In this digitised environment, accountants should always remember that they would remain the “anxiety transfer experts” for clients, allaying fears and concerns and delivering insights into their business.
To promote this, accountants needed to harness the power of social media to “capture attention, develop relationships, make clients want to work with you and convert them to clients.”
Through social media, the goal was to “identify a problem only you can fix,” give people some information about the expertise of the accountancy practice and attract a fresh audience.
The message to accountants who feared the world of digitisation is that RPA and AI were not taking their jobs, but rather doing parts of the job which “no one likes anyway” such as data entry.
“The AI is clever but it won’t replace human oversight or verification,” says FitzGerald.
“Machines are tools, but do people trust them implicitly? The answer is no.”