According to the website WillRobotsTakeMyJob.com, tasks by accountants and auditors have an estimated 94% chance of becoming mostly automated. It is no surprise then that there is concern among many industry professionals over dwindling opportunities. With the rate that technology is progressing, and will continue to progress into the 2020s, the work of an accountant is changing. The industry is seeing less of an emphasis on compliance, and the work of an accountant as an adviser is becoming increasingly important.
Taking Making Tax Digital (MTD) for VAT as an example, since the initiative was announced in 2015 to digitise tax returns for businesses, tax technology available to firms has well surpassed that required by MTD. More technologically able firms are using AI and automation, cloud-based systems and real-time reporting when working with tax. These technologies are also being used in other departments too.
While it might be true that the ‘compliance accountants’ will see a number of day-to-day tasks automated as technology is adopted, those that diversify into the role as an adviser will see such technology as an enabler, rather than a replacement.
Transformation
Speaking about the impact MTD has had on accountancy firms, Demian De Souza, partner and lead of Deloitte’s UK Indirect Tax Compliance and Technology Group, said: “MTD has impacted accountancy firms in much the same way as it has businesses. We have to think about our processes, the technologies we are using for it.
“We don’t have the excuse to use spreadsheets anymore. Necessarily, there is the need for us to transform our own processes. Our clients are demanding that from us, and for us to be as efficient as possible.
“In that context, there is both a recognition that this is necessary, and an appetite to drive efficiencies within our own processes and to use technology in the right way.”
This demand from clients and general necessity to drive efficiencies within firms is why we are seeing technology being adopted, but it is important to remember that adopting technology is no easy task, while also remembering that the human element.
Transforming processes within a firm takes time and effort, and for it to go well, it is something a whole organisation needs to be on board with. The value of it has to be recognised by everybody.
De Souza says: “When you transform a compliance process, that takes significant effort to do. It’s not just about embedding new technology, it’s about making sure that new process is understood, and that you’ve won over the hearts and minds of your business. All of that takes time.
“Technology is just one component. You’ve got to deal with process and the human element. If you get all of that right, you’ve got more flexibility to direct resources in the right place, and you are in the right place to free up that time to focus on the advisory component.
“Technology is absolutely the enabler. These sorts of transformations are the enabler to that. But you can’t just take it for granted that will happy – you’ve got to put some effort and care into the exercise so that you consciously direct your resource in the right way to free up time appropriately.”
The human element
Once technology has been adopted, it is important to remember the importance of the human side of accounting. With technology data, there is a risk that client interactions can become too robotic.
As more accountants diversify into advisory services, the importance of human interaction in this role cannot be lost to the new emphasis on data and automation, which risks losing this. For clients rely on their accountants for advice, this is vital.
Steve Gale, partner and head of audit at Crowe UK says: “The question about whether making decisions and expressing an opinion from data can ever be done by artificial means, rather than the exercise human judgment, is fascinating.
“People ordinarily want to put their trust in another human, especially when it is when people are wanting a view of what they should do in the future,” Gale says.
“When you’re dealing with perhaps more important life issues, for example – where should I invest? Where should I take my business next? Ultimately, they want to speak to somebody who’s been there and done it before.”
There is also an issue of trust with technology. People who are sceptical about the use of it would much rather know that a manual process has been undertaken, or that a person has analysed data before making a decision, rather than having technology make these decisions for us.
As Gale says: “I don’t think we’re at the place at the moment where people have sufficient trust that technology will do that for them.”
Debbie Gupta, director of life insurance and financial advice at the FCA, touched on the issue of human interaction when working in advisory services while speaking at the Personal Finance Society’s annual conference last month.
She said: “Everyone should be paid a fair amount for the services that they provide, but we do expect you to consider the conflicts that will arise, including how you structure your charges to ensure this does not lead to consumers suffering harm.
“Client circumstances may be getting more complex – as they age, they become more vulnerable, they may be less able to visit you in your offices and they may need more care from you.
“We would be really concerned if long-standing clients were priced out of advice just at the point when they need you the most.”
Will we be in a place where this level of judgement can be undertaken by technology? At the rate that it’s advancing, perhaps. For now, technology should be an enabler for accountants to free themselves from low-level tasks, and allow them to focus on higher-level advisory tasks, or risk succumbing to the prediction made by WillRobotsTakeMyJob.com.
