Harding: the technology threat to finance jobs

Technology from artificial intelligence to computer algorithms is disrupting the world of finance and will change the very fundamentals of the finance function, says Andrew Harding, chief executive of management accounting at CIMA

The rapid rise of technology has changed the way each and every one of us lives our lives, the way we shop, the way we interact with each other, the way we access information – just to name a few.

This is equally true for the business world – it is disrupting every industry, every sector and every business function. Technology is transforming not only the products businesses offer, but also the way they earn profit, moving from the manufacturing of tangible goods to service-based business models and knowledge-related activities sold via licences and subscriptions.

At the same time, technologies, such as robotics and clever computer algorithms, are taking over the basic routine functions of finance professionals. And while very few jobs could be entirely automated, it is estimated that about 60% of all jobs have at least 30% of their constituent activities that could be automated, according to A Future that Works report by McKinsey Global Institute.

This is echoed in a 2018 World Economic Forum report, Five things to know about the future of work, which estimated that machines and algorithms will handle 52% of current work tasks by 2025 compared to 29% in 2018. This technology shift could create up to 133m new job roles, but could also displace an estimated 75m jobs by 2022.

In this context, routine-based and middle-skilled roles in the accounting, client management, industrial, postal and secretarial sectors are the most vulnerable. This means that if we do not want to be left behind, we urgently need to redefine our role in business.

Machines and algorithms will handle 52% of current work tasks by 2025 compared to 29% in 2018

In fact, the CGMA Re-inventing finance for a digital world white paper found that over 50% of finance leaders globally say the competencies of their teams must ‘change significantly’ over the next three years. However, this new report also shows that most accountants and finance professionals are not growing their skillsets fast enough to make up for the impact of artificial intelligence, robotic process automation and other technologies.

Broaden skill base

To stay ahead of the pack in the digital world, it is essential to broaden skills, go beyond core technical knowledge, and be recognised for questioning constructively, guiding strategic decision-making, partnering with peers, managing risks and implementing projects, as well as providing reliable management information.

It will also be important to enhance social and commercial skills to better tell the story of the business, generate new insights and business solutions, and collaborate effectively with our colleagues across organisations, from sales to HR, and external stakeholders. This will enable finance teams to become influential business partners and value creators delivering real business intelligence to improve both overall company and staff performance.

In the digital world there will be a shift in focus from corporate reporting and governance to value creation and strengthening expertise in areas such as data analytics, cyber risk management and business models. There will be a huge opportunity to step up and drive the growth of organisations and lead them into the future.

90% of finance leaders do not believe that their teams have the skills to support the business’s digital ambitions

The recent CGMA Agile Finance Unleashed report found that 90% of finance leaders do not believe that their teams have the skills to support the business’s digital ambitions. The clock is ticking, perhaps faster than ever, for finance professionals and their organisation to plug the digital skills gap.

Learning curve

To reap all the benefits of digital disruption, individuals and companies alike will need to learn and leverage new digital capabilities. Most of our skills and knowledge now have a three-year shelf life, so it is crucial to become proactive learners, who continuously learn, unlearn and relearn new skills and competencies to deal with complexity and operate in an increasingly agile environment.

On average, the World Economic Forum says that employees will need 101 days of retraining and upskilling in the period leading up to 2022. This means that businesses need to actively encourage and support their existing finance teams in their learning endeavours by devising strategic long-term talent management and development strategy.

In turn, this learning culture will help create a higher performing and engaged workforce to drive change and deliver sustainable growth. 

So, what can we do to effectively kick start this transformation journey and close the gap between the ‘old world’ and ‘new world’ of finance?

  • leverage technology solutions. Gain an understanding of how digital technologies are disrupting existing business models and then seek solutions;
  • develop ‘human’ skills. Leadership, empathy, decision-making and judgement are skills that machines cannot replicate;
  • commit to and support continuous learning, including developing digital intelligence to leverage new and emerging technologies; and
  • keep your digital skills broad. The more you specialise in a specific technology, the easier it will be for a machine to replace you.

The more you specialise in a specific technology, the easier it will be for a machine to replace you

These are certainly challenging times machines and automated processes are not a replacement for, but a way to enhance and extend our human intelligence.

It is only by finding the right balance between human and artificial intelligence, financial and non-financial data, and by becoming part of multi-disciplinary teams that we can bring additional value to business, becoming the influencers the modern business world needs.

About the author

Andrew Harding is chief executive – management accounting at the Chartered Institute of Management Accountants (CIMA)

CIMA insight and research on the future of finance is available here


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