The Digital Age Profession and the Role of Technology
Permanent Post-Pandemic Transformation & Structural Shift
10–15 Year Horizon“The technological make-up of the office has permanently transformed post-pandemic. It has created a foundation from which more advanced technologies, such as automation and AI will be adopted across the board, including within audit practices and the finance function.”
Within 10–15 years, around 30–40% of the typical jobs within finance and accountancy will disappear. These will mostly comprise lower level, transaction-heavy roles, but it is a major change. Professionals need to be aware that the way we work is going through a massive, transformative change. This is a global trend; ICAEW receives delegations from professional accountancy bodies across the world. All are seeing these changes taking place across the profession.
1. Post-Pandemic Acceleration & The Adoption Chasm
We’ve made some great strides in the last few years. The pandemic accelerated the adoption of a lot of technology that has been available, but people had not been comfortable with using them. Some parts of the profession have historically been quite slow to adopt some technological advances that you might have expected to see. That’s hugely accelerated throughout the pandemic.
This change is happening at different paces across the profession. As with any transformation, some people and organisations are faster at adopting change than others. Newer businesses set themselves up with change at the heart of what they do, while legacy businesses are trying to adapt.
We have this very odd landscape between those that are really getting the need to go digital, concentrating on app stacks and making sure that they can serve their clients effectively in a digital-first way. Then you have others that are slower to adoption, and some technologies, such as data analytics, are not being adopted as quickly outside of the biggest firms. At whatever stage in technology adoption, digital technology is a huge opportunity for accountants, and something they can no longer ignore.
Focusing proactively on integrated cloud app stacks, automated workflows, and serving clients seamlessly in a digital-first environment with continuous client touchpoints.
Hindered by legacy inertia where advanced technologies like big data analytics, automated testing, and machine learning models are lagging behind outside the largest tier firms.
2. Current Trends: Cloud Collaboration, Agile Work & Audit Evolution
More than anything, the pandemic has driven a mindset change when it comes to technology. As we all had to find new ways of working remotely, organisations have adopted tools such as cloud technology to facilitate this change effectively.
“Cloud technologies make it much easier for people to collaborate and access information from different locations, and work together on it. It allows businesses to be just a little bit more responsive to changing situations.”
Larger organisations may have adopted cloud technology already, but it’s certainly more ubiquitous now. People are more open to embracing technology, partly because they have no choice, says Esther Mallowah, ICAEW’s Head of Tech Policy: “Going forward, I think that will remain. I think people are just generally more open to tech and incorporating that into their day to day lives, including work.”
People have embraced agile ways of working more as well, Mallowah says. Having worked in an internal audit team prior to her current role, she saw this firsthand – doing more stand-up meetings, for example, which is easier to execute in the virtual space: “Before, you would be trying to organise diaries and spaces for people to meet, but as long as the time slot is sensible, you could pretty much get everybody together quite quickly. This has, in some ways, made the audit process faster and more efficient. It also improves the quality of deliverables, because everybody is pitching in along the way.”
There is also a much greater emphasis on the way that audit practices obtain information from clients, says Pay. During the pandemic, auditors couldn’t sit in a client’s office for weeks, sorting through paper records. New methods needed to be developed:
“That’s a combination of using sort of document repositories – such as SharePoint – or the use of more in-house or custom developed tools to manage requests and exchanges of information. As the data businesses can collect becomes deeper and more complex, auditors need the tools to allow their clients to provide a large volume of information in a consistent and repeatable way. That again, doesn’t require you to be in the same room. It’s really focused people’s minds on this ability to get information from clients in a better, more consistent and more digitised way.”
3. The Acceleration of AI, Real-Time Analytics & Cybersecurity
The past two years have also seen accelerated movement towards Machine Learning and AI. These trends existed before the pandemic, but are being adopted at a faster pace, Mallowah explains.
“Automation is being applied to day-to-day transactional activities. It means that accountants in practice and business have had to become more strategic within their roles, using these tools to provide better advice to the wider organisation.”
This is particularly helpful when the reports prepared by accountants are shifting to include more than just typical financial data. “We’re using more data around things such as sustainability and net zero. There’s been more of a need to curate different types of data from different systems than before.”
“Machine learning and AI have a significant role in scenario planning, which has been a huge priority over the past few years, where the global economic environment has been uncertain and unpredictable.”
“You can use data tools to plan out a much broader range of scenarios than would be possible through more traditional modelling techniques,” says Pay. “People are starting to embrace the technology to help them with their scenario planning and be able to be prepared. There’s certainly a shift in accountancy from being backward looking to being more real time and looking to the future.”
Another trend driven by technology adoption has put cybersecurity to the front of mind for many organisations. With more critical data stored on the internet and employees accessing it from workspaces at home, entities face heightened cybersecurity vulnerabilities.
“Using secure communication channels and VPNs that a lot of people didn’t really understand before. A lot more people have a better base understanding of some of these basic security principles. The move towards the cloud is one of the big considerations. You don’t have that physical data centre that you can keep under lock and key in your head office anymore.”
4. Preparing for Change: Data Literacy, AI Ethics & Human Differentiation
All of these trends have a considerable impact on the work that accountancy professionals do, and inevitably, it will change the skills and talent need for the profession. Mallowah says that as a starting point, professionals need an understanding of the tools available and how they apply to their roles:
“A lot of their roles are now going to be done digitally and through those tools, so depending on their role, accountants might need to get a bit more technical in their understanding of tools. For example, if they’re auditors and they need to rely on AI or machine learning. They need to understand things such as ethics around AI, for example. They need to be aware of what the risks are and how to address that.”
It is advisable for professionals to acquire skills that allow them to become more strategic – being able to extract insights from data and discern what it means for an organisation. Chartered Accountants should seek to do things that machines cannot do. That means getting involved with management, strategy, negotiations, etcetera. Essentially, anything that involves human interaction.
The compliance roles in your company will not be there in the same way. But clients and stakeholders will want our expertise applied in deeper, more strategic ways. We can look at data and analyse it and advise on how to make improvements. Emotional intelligence and being able to communicate clearly with people will become even more important as we continue to transition to this more technology-oriented way of doing things.
While deepening data and the growing need for data literacy could prove a challenge for accountants, organisations are developing tools to ease the transition. For example, Engine B is developing a common data platform to allow accountants to map data in a quick, easy and efficient way, meaning they can focus on what they are good at. We know the technology is there, but we also need the tools to realise the benefits.
Business leaders need straightforward, practical advice in the current climate, and Chartered Accountants are well placed to deliver it. During the pandemic, professionals in advisory and non-executive director roles have been pivotal in ensuring that organisations were able to weather difficult storms. This short-term thinking, plus long-term leadership, will be the critical work of the profession.
Chartered Accountants will see an increase in the volume of technology across their organisations. More activities across various departments will be more interconnected. The demand for Chief Technology Officers (CTOs) within organisations will only keep increasing. And accountants will be at the heart of business, driving strategy in a technologically savvy way.
The Strategic Imperative: Digitalise Practice or Risk Obsolescence
“If the pandemic has shown us anything, it’s that it’s vital to embrace new technology. Legislation is driving the digitalisation of business, and if business is digitalised, then practice needs to be digitalised. Chartered Accountants need to look at the steps they need to make to keep up with the rate of change. You constantly have to look at what new tools and technologies are available and the advantages they can offer.”