How will the role of finance functions – and professional accountants generally – change as artificial intelligence (AI) transforms the workplace? It is the most pressing (and often worrying) question that the profession has faced.
A new report from ACCA and Chartered Accountants Australia and New Zealand (CA ANZ), with input from experts at PwC, sets out a refreshingly dispassionate but in-depth analysis of the challenges ahead, and the steps that organisations and individuals can take to prepare.
Trust and pre-emptive advice are at the centre of this new vision of the finance function
The report, Finance evolution: thriving in the next decade does not hold back on the urgent need for action but stresses that accountants and finance functions have everything to gain from the AI revolution.
‘Looking back and traditional forecasting is no longer enough,’ say ACCA chief executive Helen Brand, CA ANZ chief executive officer Ainslie van Onselen, and PwC UK partner Simon Seymour in their introduction to the report. ‘A failure to transform will see the finance function marginalised within the next five years.’
But, they add, the finance team could be essential in this new world if they ‘stand as a beacon of trust in the information and analysis across their internal and external stakeholder communities’. Trust and pre-emptive advice are at the centre of this new vision of the finance function.
All-pervasive
The report, which draws on contributions from more than 150 finance leaders worldwide and 2,300 respondents to a survey, discusses the key trends that will impact the world this decade, including the rise of AI and machine learning in every aspect of our lives.
It goes on to look in detail at the specific drivers of change for the finance function – the macro trends affecting all organisations as well as the transformational trends that are more specific to each organisation.
The goal is an autonomous function that focuses on upcoming risks rather than the past
The report argues that these changes make the continuing relevance of the finance function dependent on its ability to add value: 77% of respondents to the survey said they were already significantly or moderately including value-based concepts in developing the strategy for their finance function. But the ultimate goal for the future, says the report, should be autonomy – a pre-emptive, autonomous finance function that focuses on advising on responses to potential upcoming risks, rather than reporting on the past.
This function uses AI to predict trends and analyse risks before they crystallise, ensuring the function adds value and remains at the strategic heart of the organisation. As one Malaysia-based CFO says, ‘the autonomous finance function is a dream for every CFO’.
A Canada-based CFO says in the report that as organisations have become more reliant on data, so the finance team has taken on more responsibility beyond pure finance.
‘No matter what issue comes up, the buck stops at finance. Sales does not get involved. Commercial does not get involved. Finance is seen as the problem-solving entity within the business. And we are expected to be.’
Key competencies
So what do organisations and finance professionals need to do to be ready for the future? The report describes six ‘domains’ – a series of competencies – the finance function needs to develop to reach the goal of autonomy.
Transitioning from a responsive finance function to one that focuses on pre-emptive action, however, will require strategic skill and considerable investment in both skills and technology.
Time to strategise
The final section of the report looks at actions that can be taken to adapt the strategy of the finance function and develop the new skills and jobs that will be needed.
Two-thirds of participants surveyed said their own function already had in place a full or partial strategy for the next three to five years, which is encouraging. The report sets out clearly the scale of the transformational task and investment needed.
Developing the right skills within the finance function was one of the biggest concerns for participants taking part in roundtable discussions; most commented that this was the most significant factor hampering the progression of the function.
Participants said they worried about current and impending skills shortages and talked of the need to accelerate the career paths of those working in finance so they can develop more specialist skills at an earlier stage.
For finance functions that adapt, the future is bright
Some participants talked positively of individuals with a background in different areas – such as engineering – who later qualify with ACCA as bringing a valuable perspective. The report suggests that bringing in complementary skills to help address new requirements could be the secret of success in the future.
While the report stresses there will always be a need for finance, the future relevance of the finance function is at stake here. ‘A successful function will embrace new, agile skillsets, career paths and capabilities to ensure it fulfils the broader role required of it by its stakeholders and continuously reinvents itself,’ says the report.
For finance functions and finance professionals that adapt, the future is not only bright, but pre-emptive and autonomous.
