by Jon Eldridge
Are robots about to replace accountants? Increasingly services that were once provided by accountants are now automated and new digital databases, such as blockchain, are emerging that could bring about even greater automation. The role of the professional is already changing, but is its continuation assured or will lesser skilled ‘non-professionals’ move into areas traditionally occupied by experienced financial service providers?
These hot issues were addressed at the ‘Digital Day’ conference recently organised by Accountancy Europe in Brussels. Expert speakers tackled every aspect of the digitalisation of auditing, accounting, and advisory work: from cyber security to legislative impacts and the future of the profession. While concerns about technological impacts were raised, the general mood among the around 200 delegates was cautiously optimistic
Indeed, Accountancy Europe’s own survey showed that 56% of its member organisations believe that technology will improve accountancy services. Nevertheless, just under half (42%) thought that technological developments represent a “serious challenge”. The security challenges were outlined by Lars Van Mulligen, a cyber specialist at Europol, though he reassured delegates that most issues could be prevented by involving a security expert.
The greater challenge, however, was articulated by Richard and Daniel Susskind, the authors of The Future of the Professions. For their book, they researched how technology will transform the roles of not only accountants but teachers, consultants, lawyers, and even the clergy. They argue that such professions are an antiquated and unaffordable solution to problems that can be addressed by new ways of delivering expertise once in the exclusive domain of experts.
In accounting, increasingly powerful and pervasive digitalisation is allowing data to “generate new insights that haven’t been had before”, said Richard Susskind. He sees an opportunity for accountants to exploit these insights, but cautions that the “market is inviting new professionals in” — i.e. those able to analyse the data but haven’t been through the normal route to accountancy.
While in the short-term, his son Daniel predicts that some professionals will respond by becoming more efficient, it is the non-professionals who will eventually take over in the same way as nurses with access to sophisticated diagnostic tools will and have already started to take over the tasks once performed by expert doctors.
These arguments were countered in a lively debate by Mona de Boer, Director in the assurance practice of PwC NL. She posed 2 scenarios for the future: accountants do things differently or do different things. She finds the rise of technology is not about robots replacing accountants, but about using technology to enhance professional services. For example, algorithms can help spot irregular patterns in data. There will always be a “demand for trust’, she said. “The challenge is to use technology as a driver to promoting trust.”
But Daniel Susskind observed that it was a “big mistake to think that professionals have a monopoly on trust”. Clients don’t want a trustworthy provider, he said, they want a “reliable service”.
Moderating the debate, Jyoti Banerjee, who leads the International Integrated Reporting Council on the <IR> Technology Initiative, took a broad perspective of the future of accountancy. He advised against being a ‘mono-capitalist’ concerned only with financial capital, but instead to be a ‘multi-capitalist’ who recognises the value of human, environmental, and information ‘capital’. “The future of the professions will be [ensured] when we are all multi-capitalists,” he concluded.
Enhanced service provision
Digital Day also showcased some success stories of companies such as Inflo from the UK that are taking advantage of the digital possibilities that are being created. Inflo is a relatively new company that offers mid-tier and independent accountancy firms access to innovative software to improve the service that they can provide to SMEs. CEO Mark Edmonson said that the real challenge for data analysis is acquiring customised data. The Inflo solution allows data to be transferred in a flexible way thus widening the scope for analysis. “It’s so much more effective to look at everything than, say, 60 elements,” he said. “The value that the client is getting is far higher.”
One country where auditing software has really taken off is Estonia. Nearly all companies based in the country (95/96%) compile data online, according to Märt-Martin Arengu, President of the Estonian Auditors’ Association. He added that Estonian notarisation services are using blockchain, the online technology that enables assets to be securely transferred across the world. Also, open data is making it possible to “builder greater services on that data”.
One incentive for using analytical software is cost saving, highlighted Perttu Jalkanen, CCO and co-founder of AREX. His innovative invoice-financing platform allows SMEs to benefit financially from real-time auditing. Meanwhile, Donato Calace of eRevalue emphasised the value of combining qualitative data to the overall picture. Digital technologies are enabling narrative reports to be analysed, he said, and the “challenge for systems is to make this data a story”. Such an end result would achieve great time savings.
Stephen Quest of the European Commission’s Directorate-General of Taxation and Customs Union admitted that tax policy was in some areas “struggling” to keep up with these technological developments. “The environment is shifting and the challenge is to make sure policy stays relevant,” he said. But governments need not be too fearful. He said that simplified systems for small-scale electronic commerce were “already successful in bringing in more revenues for exchequers”.
Romanian MEP Victor Negrescu also struck a positive note. He saw opportunities for digitalisation to create new, skilled and better-paid jobs. He said that by 2020 an extra million digitally skilled workers would be required in Europe, but he added that politicians should not forget about those companies left behind. Clearly, however, the lessons of the past should also not be forgotten: those who adapt quickest to the changing environment stand to benefit most from the opportunities arising.
“Man or woman and machine makes an unbeatable team!” is how Olivier Boutellis-Taft, CEO of Accountancy Europe, summed up the day, taking argument from studies in the world of chess players. He noted that technology can help, but only insofar as it is properly programmed and operated by humans who have the ability to assess what the real problem is and use ethical judgement and emotional intelligence to respond to society’s needs. Machines alone will not promote social and environmental responsibility that are in great demand.