THE emerging trends and issues in finance, is about having good knowledge of economic and regulatory impacts of financial crisis and the growth of new types of finance.
In today’s world, many aspects of accounting work is digitised. This means that the accounting works can be done online and from any location.
This is a new trend in finance as it implies that with your laptop, computer, including your phones, the accountant can work from home or the office.
Rob Hoehn, co-founder and CEO of IdeaScale, the largest open innovation software platform in the world observed in an article published in Innovation Management, that the financial landscape is changing and the crowd is uniquely suited to help banks and other financial institutions solve some of the challenges they face.
He stated that there are five emerging trends in the financial sector.
Data Analytics: Using data analytics can help improve the customer experience, increase speed and efficiency and find the competitive edge. In this case, crowd data that addresses any of these subjects is the data that should be analyzed that will improve these key areas of performance.
Digitization: We’re talking about an omnichannel digital presence here. The boundaries between banks and their customers are becoming increasingly fluid. For example, what if in the future, you can automatically make a purchase directly from the commercial you are watching? How will banks support that level of functionality. Asking both employees and customers about their behaviors will help prioritize your digital efforts.
Security: Cyber security is paramount in every industry, but perhaps none more so than the financial industry where privacy is crucial. Oftentimes, IT organizations will reach out to the crowd to ask for ideas about vulnerabilities or new technologies to help them stay current.
Mobility: Mobile continues to dominate all industries as the most common customer touchpoint. It is possible for anyone to share ideas and wireframes about how to improve mobile experience.
Regulatory Challenges: Most global financial services executives believe regulation has enabled the growth of their business. Sometimes your employees have the best ideas about how regulatory challenges impact your business.
Experience during the COVID-19 era when most workers had to work from home made it obvious that an increasing number of accounting organisations are growing comfortable with the idea of having their staff working remotely. This however, requires serious consideration of cyber security to avoid costly data breaches.
We are all aware about hacking. From our WhatsApp, Facebook to our emails, including phone calls, we receive messages suspicious messages and once you make the mistake of clicking on the wrong one, your account will be emptied.
This is also applicable to the financial institutions.
So, why the new trend has saved a lot of cost and given workers the latitude to work from the comfort of their homes, it also has its challenges.
Even meetings among financial experts have become such that most are now done on zoom and other digital platforms. It is now a common feature in banks to see workers wearing ear phones, glued to their computers holding meetings while still finding time to attend to customers.
Imagine the cost implications and the risks involved if such workers were to travel to Lagos or Abuja for such meetings.
Also, the International Association of Accounting Firms in a report published January 18, 2021, listed seven trends in finance to include Environmental, Social and Governance otherwise, known as ESG reporting. This gained new
found focus in modern organisations.
It stated that ESG reporting helps companies fulfil consumer mandates for more corporate responsibility, while also working as a critical metric that delivers greater levels of organisational risk mitigation.
Not only has the focus on sustainability and ethical issues continued to sharpen inside company board rooms, but the growth of responsible investing has also grown in popularity among external investors. ESG criteria have become a decisive element for key stakeholders looking to measure business performance. This means it’s vital for companies to quantify their ESG efforts.
Tomorrow’s accountants must combine their technical skills with professional, ethical standards to meet social and environmental challenges head-on.
2. Automated Accounting: Successfully implemented automation has already helped more than 91 percent of companies improve compliance.
Not only that, but by using new automation technologies, accountants don’t have to spend as much time, energy, or resources on painstaking manual tasks involving spreadsheets or number crunching. Thanks to automation, CPAs can dedicate time on value-adding tasks that require human-to-human interaction or careful analysis.
The main reason that automation is here to stay is because of its role in enhancing human accountants. Automation can eliminate confusion, minimise errors, reduce time-wasting and make slow-moving processes a thing of the past with higher productivity levels.
3. Cloud-based Accounting: Technology trends in accounting go beyond automation too. The cloud is fast-becoming a popular choice for accounting firms due to its ability to better allocate digital resources and reduce the need for physical hardware.
Linked closely to the emerging trend of remote working, firms have access to their system at any time from anywhere thanks to cloud-based capabilities. CPAs are no longer bound to internal networks or far-off data centres.
Going into 2021, accounting firms must innovate and embrace digital transformation. Cloud-based service providers support accounting firms by assuming responsibility for any software updates or system integration, giving internal IT teams the time to focus on more strategic tasks.
4. Increase in Digital Payments: Across the globe, the rapid move towards digital payment adoption is changing the face of payments. The knock-on effect is a shift in the financial landscape for accountants.
A report by Accenture expects nearly 420 billion transactions to switch from cash to digital payments by 2023 ––and continue to grow to around $48 trillion by 2030.
While technology makes it much easier for end-customers to outsource payments, and for accountants to take those transactions into account, the rapid move towards digital payments puts additional pressure on banks.
In fact, the same Accenture study also concluded that 75 percent of bank executives claim COVID-19 has increased the urgency of their plans to modernise payment systems – demonstrating the massive shift first-hand.
Digital business payments stand to eliminate any unnecessary back-and-forth of manual invoice processing, while saving significant time across the entire operation. Digitising payment processes slashes accountancy labour costs.
5. Blockchain: Another trend, is the growing number of corporations and consumers moving towards blockchain-based modes of transactions and financial services.
Today, more than ever before, financial clients have non-bank service options delivered by emerging fintechs and cryptocurrency alternatives. By 2023, worldwide spending on blockchain solutions is predicted to grow to around 16 billion.
Across industries, businesses have an appetite to reap the benefits of distributed ledger technologies. A financial system underpinned by blockchain offers manyopportunities for the accountancy profession in the near future. Learn more about Essential Blockchain Skills For Accountants of the Future.
6. Data Analytics: Data analytics is also anticipated to make waves in the accounting sector along with cloud-based technology and automated accounting. As a direct result, the demand for data specialists will sky-rocket.
It’s nothing new for accountants to use data analytics to help their clients uncover valuable financial insights and identify process improvements that can increase efficiency or help companies to manage risk better.
Data analytics’s value lies in its ability to give organisations a much clearer handle on their performance to facilitate better decision-making. Through a combination of high-quality data and comprehensive accountancy reporting, organisations are best-positioned to perform better financially.
7. Remote Accounting Work: One of the silver linings to come out of the COVID-19 pandemic is that it’s shown just how well financial organisations can operate with remote workers. Thanks to a combination of emerging technologies and digital accounting, CPAs working remotely can still deliver a top-quality service for their clients.
Even with an increasing number of accounting organisations growing comfortable with the idea of having their staff permanently continue to work remotely, firms have to consider cyber security measures to avoid costly data breaches.
From handling financial records to analysing data, many aspects of accounting work is digitised, meaning it can be done online and from any location. Whether from home or the office, accountants will remain responsible for helping clients strike a sustainable and cost-effective balance into the future.
Conclusion:
From what we have seen, read and heard, one can authoritatively say that more than 80 percent of bank executives believe that innovation is important to their organization. What is interesting though, is that most of these trends turn up in other industries, as well. We have heard about downsizing and those terms associated with reduction in the workforce. This is as a result of innovation. For instance, most banks do not pay any amount below N100, 000 to their customers across the counter as they will insist on the customers using the automated teller machine (ATM) or through electronic transfer.
By EGUGBO RITA UZOMA 
A lecture delivered at Delta State University on May 5, 2021
