As we all know, Artificial intelligence (AI) is no longer the stuff of science fiction movies. While in these movies (usually apocalyptic tales like Terminator or Blade Runner) mankind fares badly, in reality AI is being spearheaded by commercial giants such as Google, Microsoft and Amazon and our daily lives are generally enriched by AI systems such as chat bots, purchase prediction and news generation. So, what is really going to happen?
For the purposes of this blog let’s look at the wealth management industry and specifically our friend the accountant. Accountants control expenditure, ensure we get paid for the products and services we provide, pay our salaries, manage regulatory and tax reporting and much more besides. Can they really be replaced by computers, albeit rather intelligent and self-learning ones? What does the rise of AI mean for the future of Accountants - Love them or hate them, accountants are the backbone of any successful business and surely can’t be replaced by AI, can they…?
I’m a big fan of Simon Sinek’s ‘Why?’ best seller, a must read if you haven’t read it (and no I’m not on commission for his book sales). For every fundamental business decision or change the fundamental question of “Why?” needs to be answered.
Let’s take a closer looking at accounting and specifically how this has changed over recent years in the global wealth management sector. Don’t worry, I’m not going to bore you with the history of the abacus, computers with punch cards or stories of vast paper ledgers – I’m too young to remember such things - honestly!
In today’s modern wealth management market there are been a growing trend to reduce accounting costs which is driving behaviours, such as outsourcing and automation. Larger global players look to centralise and leverage lower cost geographies, such as Mauritius and India, to support their accounting needs. Several providers in lower cost geographies now also offer outsourced accounting services for those businesses in higher cost geographies. Investment in technology is increasing year-on-year and increased integration to third parties for investment and banking transaction automation is replacing once manual processes.
These changes in the wealth management industry are being driven by cost pressures and the need for timely and accurate accounting information. Surely then, this trend will continue and the need for technology to provide further automation is inevitable. This is the answer to “Why?”
Having answered the Why? let’s turn again to whether AI can replace accountants. A driver in favour of a full switch to AI is that there is certainly still scope for significant improvement and increased automation across the wealth management industry. We see first-hand the perils of manual processing, which is both costly and error prone.
But thinking further, while you can automate the production of a report, who will the auditors talk to when they have questions about the annual audit? And can the complexities of your business be understood by a virtual machine? At the moment and in the near future there is no replacement for the need for human intervention at points like these.
So, at this stage the answer is that no one knows exactly how far technology and AI can automate activities and when they can actually replace accountants, but what is clear is that technology advances will continue and at an accelerated pace as the market demands ever increasing levels of automation. I am sure the accounting landscape will look very different in the not too distant future, and the role of accountant will change as a result, but it’s going to take time for businesses to adapt to this change and human intervention will be needed for a while yet to work alongside technological advances and interpret vital data.
Of course, it’s not just accountants that will be impacted, all areas of business will transform over the coming years so maybe, just maybe, I will get the hover board that Back to the Future promised me to make my customer visits!
Doug Cooper is Business Development Director at TrustQuay.
Doug is still waiting for his hover board.
You can find Doug on LinkedIn
Douglas is Business Development Director at TrustQuay