Accounting Industry Embraces the Future of FinTech

A new study is warning public accounting firms that the financial technology (FinTech) market could have a negative impact on its revenue stream.

A recent PwC study, Financial Services Technology 2020 and Beyond: Embracing Disruption, predicts that advancements in financial technology will lead to 28 percent of the banking and payment business, and 23 percent of the insurance, asset management and wealth management business being in jeopardy.

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But Bill Thompson of Accounting Today believes that FinTech could be a “welcome development” for accounting firms and the types of services they offer their clients.

He uses the example of data entry, which can take hours for employees at public accounting firms. The advancements in FinTech will enable those business models to be built only once—significantly reducing the time it takes to prepare an audit or create a budget or forecast.

In fact, the accounting industry has been the center of innovation in artificial intelligence (AI), automation, cloud accounting, and Open Banking—all of which can reduce the time accountants spend on tasks such as invoice management, credit control, cashflow forecasting, and reconciliations, allowing them to focus more on strategic work.

So it’s not surprising that earlier this month the largest accounting firms – EY, Deloitte, KPMG and PwC – revealed that they have been investing billions of dollars in AI and data technology products. KPMG has committed to a $5 billion investment, PricewaterhouseCoopers said it will put in $3 billion and Ernst & Young plans to invest $1 billion.

The investment goes beyond simply automating accounting tasks, but will also include data analysis and tech training for all employees.

The head of business futures at the Association of Chartered Certified Accountants, Narayanan Vaidyanathan, said the technology will transform the accounting industry.

“Many of the routine jobs will go as areas such as invoice processing are automated. However, many more jobs will be created, as accountants and auditors have a wealth of more information available to them: They can now check all of a company’s transactions in real time, with data analytics allowing them to spot trends and anomalies,” Vaidyanathan said.