According to Gartner, in the early 2000s, "digital" was among the top five priorities of executives for only 2.1 percent of companies surveyed, whereas today it is a priority for one in five companies. The percentage of companies with a digital strategy has increased from 62 percent in 2018 to 82 percent in 2019, Gartner confirms, estimating that 90 percent of today's companies have already experienced various types of disruption in their business models. And that's why we can see a trend that has been observed for the past several years: the digitisation in finance.
What is finance digitisation?
Digitization is the process of converting information of any type into a digital format. And digitization is extremely important within financial units. Historically, the finance and accounting teams have been early adopters of technological tools because they already rely on high-level IT to optimize business processes and interactions. Organizations with strong financial leadership are investing in digital capabilities to meet both compliance and strategic initiatives. More and more CFOs are turning toward digitization, not only as a means to increase cost-effectiveness and efficiency in operations, but also as a platform to develop additional high-margin products and services. But how does it change the world of finance and recruiting? Let’s take a look at this together!
What roles have been radically altered ?
As already mentioned, technology and digitalisation are rapidly transforming the way in which the financial sector is operating. Innovative applications of digital technology for financial services, or Fintech, are being used to alter the interface between financial consumers and service providers and are helping to improve communication with consumers and increase their engagement. But the development could not not influence some details and alter a few roles in the company.
- Business partnership manager
Business partnering was invented in the mid-1990s and it's safe to say that our financial professionals of the early 2000s had not yet encountered the term. But when the role of the management accountant began to change as a result of the digitalization of finance, the business partnering method became much more appealing. Today, the role transformed into a business partnership manager, who could be an accountant or could be someone who works on the finance team and has no formal accounting qualifications because the talent you need for this role is not related to numbers, but is about contributing insight. He is doing it by providing help and guidance with the numbers, but also developing a two-way relationship that fosters interdepartmental communication.
- Management accountant
The next role that has been transformed by the digitization of finance is the management accountant. At first, the main tasks of the management accountant were making adjustments at the end of the month, such as prepayments and accruals, managing balance sheet accounts, and preparing reports.
Sometimes these people were called excel masters, but technology in finance has advanced so much that most systems have reporting capabilities that our management accountant of twenty years ago could only dream of. Today, management accountants can get self-service reports, which means that a manager can find the information he or she needs without the involvement of a management accountant. This has dramatically transformed the role, which has elements of what it used to be, but also elements that have certainly changed for the better. Typically, the management accountant now spends less time checking reports, and more time understanding and explaining the numbers.
What roles have disappeared?
The impact things like SaaS, Apps and mobile devices have had on accountancy and the wider business. And now after talking about the transformation of a few roles due the finance digitisation, we can talk about the jobs that are rapidly disappearing from the job boards.
- Bank reconciliation clerk
It is not certain that you remember exactly what this position means. The bank clerk was responsible for receiving paper statements, reconciling transactions in the main system, and ensuring that bank accounts matched the information on the paper statements. Banks were slow to digitize their finances, and many continued to send paper statements long after they were actually needed.
Today, SaaS systems invariably offer bank links through which transactions are downloaded and automatically recorded if they match predefined rules. There is no longer a need for paper, and the huge amount of paperwork to fill out and reconcile documents has disappeared. Of course, there will always be a need for a human eye to manage exceptions, but to some extent AI takes away even that function.
- The expenses clerk
This is one of the tasks that could disappear completely depending on the degree of digitization of finances in the company.
In the 2000s, almost all companies used paper-based cost accounting. And even today, some companies still use this method, although there is no real reason for it. In fully digitized finance teams, this role no longer exists as such. Often, expenses are an additional task that a person does on top of their primary job, as most of the work is handled by an expense accounting application like Jenji. There is no need to even keep a file cabinet, as everything is stored online and payments go directly into the financial system and payment processing through modern integration.
Technology in finance- what you can miss
In all of the examples above, one theme repeats: the reduction of manual processing. This is the first step of going digital for every company.
Previously, hours were spent pulling information, entering it into systems, and then formatting reports for managers to do their jobs. Today, also because of COVID-crisis companies understand the importance of the finance digitization and realise that manual work has been removed, allowing teams to downsize and focus on the really important tasks.
And as we see now, some tasks have all but disappeared, some have changed dramatically, and some are completely new, but all of our work lives have changed for the better thanks to technology in the finance industry. And one thing is for sure: more changes are coming!