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From regulation to innovation

Accountancy professionals could be forgiven for feeling up against it right now. Recent years have already presented a wide range of challenges even before the arrival of the global pandemic which is now preoccupying us all. 

Hiring, training and retaining talent, new regulations, cybercrime, commoditisation and an almost existential search for relevance have been preoccupying accountants at every stage of their career for some time now. In recent years, however, they have been overshadowed by two other concerns – the profession’s ability to adapt to the rapid pace of change and the impact of new technology.

Technology in the real world 

It feels almost cliched now to talk about the rapid pace of technological change because we hear about this so often, but it is the case that we are now seeing technologies that might have previously only been discussed in academic research papers really changing our world and the way we work. Artificial Intelligence (AI), machine learning, data science and the Internet of Things are all very much innovations impacting the here and now and, as with all technologies, their adoption has been met with as much anxiety as enthusiasm. 

It would be trite to dismiss concerns around the widespread adoption of new technologies. Let’s not forget this period of innovation and adoption has been referred to as nothing less than a new industrial revolution. In the circumstances it is understandable that for those for whom technology is not their first love or main area of expertise, there may be concerns around how and why these technologies are being rolled out.

Change can be difficult and disruption feels particularly challenging. But without wishing to negate anyone’s concerns, I would argue that new technologies are very much a force for good for the accountancy profession and individual accountants. 

Tech for good 

The way in which accountancy firms operate now is remarkably unchanged from a decade ago or even longer. Outside the profession, however, there is scarcely a job or industry which hasn’t seen sweeping technologically-driven changes, most of which have fundamentally been for the better. 

Other industries and indeed other industrial revolutions have demonstrated that, if approached in a smart way, new technologies have largely made professional lives better, jobs more satisfying and have strategically improved business performance.

It is also significant that digital transformation has become a democratising force, providing access to services and markets for people and businesses around the world who may otherwise never have been able to benefit from them. In the same way, accountants are also able to create new opportunities for their own practices by creating innovative new services and models, thus tapping into new revenue streams.

We know that the rate of change is set to accelerate over the next few years and that disruption to the accountancy profession is now looking inevitable. Through this period of change, the UK government and other regulatory bodies and associations, such as the ICAEW, are supporting key industry players and researchers to develop technology and services that will transform the UK’s services industry; and rightly so, as their understanding that firms and their clients will benefit from disruption magnifies. 

A changing profession

Accountancy is changing. There is no way it can remain the same, even if accountancy firms resist change (and resistance to change is now starting to rapidly dissipate in the industry). Emerging technologies are leading the transformation of today’s accountant into a role requiring greater levels of critical thinking. Routine tasks are going to become automated which means finance professionals will be able to concentrate on more strategic, skilled, judgment-intensive activities. 

It may end up being the case that some elements of our current ways of working will eventually not be necessary. However, it is also the case that others will change to become fit for purpose for the world we live in, while at the same time new roles will emerge and new opportunities for reskilling and people development will be created.

An important part of the change which is often mired in concern is the impact to smaller and challenger firms. We must collectively ensure we open up the market and level the playing field. Enabling challenger and smaller firms to compete on the same footing as the big six is an inherently vital requirement to secure the diversification of service offerings for all clients. What goes hand in hand with this ideal, is the requirement to make these future-proof solutions collaborative and open source. 

How can accountants best prepare?

It is clear that accounting processes as we know them today, will not be the accounting processes we use tomorrow. To adapt to the paradigm, a sound understanding of technology and its application within accountancy coupled with experience or knowledge of data and analytics in this area will really help accountants thrive.

I truly believe, however, that the single most important critical success factor is a mindset that embraces change. No career is linear and the ability to welcome the new will stand us all in good stead for a future. That future may sometimes look uncertain but, from where I am standing, it also looks hugely exciting. 

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