Technology continues to change the way companies manage their financial functions, and most executives are well aware of and support the role of technology within their organizations. But what are the benefits of technology today? How will this change over the next few years and how will technology impact the next generation of financial professionals?
These questions were central to Forbes Insight’s May-June 2021 survey of 250 US Treasury executives conducted in collaboration with KPMG LLP. Executives represent all major sectors and work for organizations that have generated at least $ 1 billion in global revenue in the most recent fiscal year. We also talked to several KPMG readers to enhance the data context.
What do executives expect from technology?
Heather Paquette, KPMG’s National Technical Guarantee Leader, said: “By leveraging smart analytics and artificial intelligence, we gain these insights in both business value creation and financial decision making.”
Smart Analytics and Artificial Intelligence — With the introduction of cloud computing, you can get what could be considered a dream team of financial technology. Edge computing, blockchain, and automation technologies such as robotic process automation (RPA) and business process automation (BPA) also play an important role.
Which solution achieved the fastest mainstream adoption in the industry and how will expectations change as a result?
Which technology — and why
As the survey shows, finance executives are well aware that artificial intelligence and other advanced technologies are being used in the industry. And because it’s both powerful and expensive, modern financial technology needs to substantially justify itself.
The most obvious advantage for executives is to gain better insights through more subtle data. Scott Flynn of Audit, Vice Chairman of KPMG, said: insight The data can be identified. “
For certain essentials of current internal finance functions, most executives pointed to cloud computing and storage (74%). Smart analysis (62%) including data extraction and transformation, data visualization. Artificial intelligence (56%) including machine learning and natural language processing.
Most executives expect BPA (43%), process mining technology (42%), and RPA (48%) to be the financial capabilities they need within two years.
“At this point, robotic process automation is underestimated,” says Paquette. “It should be higher on executive radar.”
Many executives expect blockchain (51%) and edge computing (36%) to become important internal tools within five years, but within three years.
Internal functions and external auditors
For most business leaders, internal reporting is just one aspect of their financial function. The role of an external auditor is often as important as the auditor’s use of modern digital tools.
Almost all executives (98%) say that external companies use advanced technology in their auditing process, and most agree that this will improve the quality of their audits (98%). .. (This represents a significant change from just three years ago when 74% of executives mentioned the use of advanced technology by external auditors. In more depth, only 26% of executives in 2018 were artificial. I thought intelligence was a must for external companies. That’s 61%.)
According to executives, advanced technology provides deeper insights into areas of increased risk, provides better benchmarks, and improves data coverage.
The majority of executives also say that advanced technology enhances the client experience (94%).
Perhaps that’s why most executives (58%) consider external auditors to be more technologically advanced than internal financial functions. Only 8% of executives believe that their technology is being used more advanced.
These results do not surprise Flynn.
“We need to be able to prepare, perform and perform audits of companies across a wide range of disciplines,” he says. “I’m working with them, [also] Predict where they are heading. “
He agrees with Flynn’s assessment, but Christian Peo, KPMG’s national management partner for audit quality and professional practice, also pays close attention to its few financial executives for its technical pioneers. I think it’s important.
“To catch up with the rapidly changing and innovating 8%, we need to invest and spend time, comparable to how they are changing,” says Peo. “We need to keep up with them and we need to spend. It’s an opportunity to improve the quality of our audits.”
So where should external auditors invest to stay up to date and meet these growing expectations?
“Data and analysis,” says Paquette. “We expect 60-70% of control to be automated in the next 5-10 years …. We are evolving our auditing approach with the companies we are auditing.”
The future of talent
Conversations about AI and automation often focus on the risks to human work. Will robots replace humans? Of course, the answer is no. Although the number of industries operated by automation will change, “human factors” will be irreplaceable in certain functions.
On finance, Flynn said: “People who are intellectually curious and able to derive insights from different data pools will be truly exceptional …. to them in the future of auditing, and frankly, in future funding. Has a role. “
Flynn believes that technology will change financial reporting and improve the lives of financial professionals (including auditors). For example, in the form of machine learning or natural language processing, AI can automate tasks that require time-consuming manual monitoring. As AI adoption increases, much of the industry’s human capital can be devoted to more creative tasks.
Looking through this lens, it makes sense that tomorrow’s financial professionals are expected to be sharp and insightful thinkers. Most executives state that financial reporting staff need to have critical thinking, reasoning, and problem-solving skills (80%). Research finance skills (66%); Ability to achieve specific goals by developing relevant data analysis (66%).
“The ability to perform detailed analysis and derive correlations from individual data is very important,” says Flynn. But he adds, “not to mention,” technology fluency is also important.
Indeed, the work of the next generation of auditors can be more technical in nature than the work of peers working in the internal finance department. In the former case, executives prioritized AI, RPA, blockchain fluency (76%) and data science background (75%).
“Whether it’s data and analytics or the use of bots in auditing procedures, the next generation of auditors must have the basic skills of technology,” says Paquette. “And they need a keen understanding of the intersection of financial processes and financial and technology risks.”
He agrees that technology is essential for a new generation of financial professionals, but Peo offers one important warning.[T]You also need some traditional skills: you can talk to management [and] The Audit Committee takes very detailed findings revealed through the use of technology in an easy-to-understand way and deploys them in a way that is understandable in non-audit stories. “
“Humanity” never becomes obsolete.
For better automation
For good reason, digital transformation is an ongoing concern among most executives. As research reveals, financial technology is evolving rapidly and changing the industry.
Tendency to grow …