Emerging technology in finance you should know about
The 2020s are becoming a vastly exciting decade, with emerging technologies already transforming the future of the finance industry.
You may not have been thinking about emerging finance technology you could be using. If you rely on traditional financial software, your business could be behind the curve within the next few years.
For the finance function within businesses where accuracy, speed and process efficiency are the foundations for effective working, the opportunities on the horizon offer significant benefits. There will inevitably be some disruption, not least because of the accelerating pace of change.
So, what is on the horizon in finance technology? In our article, we will look at emerging technologies impacting the future of the finance industry, providing insight into predicted digital disrupters set to change the way the finance function within every organisation will work.
Opportunities for the finance services industry
There are enormous possibilities for finance teams with the right people and technology combinations in place. However, as with any business change, the key to success is having a clear vision and strategy to pave the way.
Embracing the future of the financial services industry will then become a positive and planned journey that ensures business objectives are achieved.
- Automation speeds up the pace of business and frees up finance professionals to spend more time on added-value work.
- Strategic insight enabled by powerful data and analytics resulting in more confident and more forward-thinking decision-making and planning.
- Widespread and faster connectivity, improved cyber security, and remote access make flexible working arrangements a robust alternative to the traditional office-based finance team.
- New opportunities to collaborate and to improve visibility and trust across the supply chain and throughout the procure to pay and order to cash cycles.
- The chance to reimagine how finance could work and re-frame the future with a balance of people and technology helps businesses achieve substantially more.
Finance and business leaders need to stay abreast of emerging technologies in finance that can make their professional lives easier and enable them to hone their skills. Being comfortable and adaptable regarding the future of finance technology will help organisations stand out above their competition.
How technology trends are transforming the finance services industry
Organisations are leveraging exciting technological advances to new levels to help them automate and streamline operations.
These are the financial services technology trends you should be keeping up with:
Cloud computing
A massive trend in accounting and finance technology in the past few years has been the emergence of cloud computing. Every year, exciting new cloud technology in the finance services industry emerges to make financial professionals' lives easier.
Cloud accounting software has quickly replaced the need for individual businesses in the financial sector to buy and maintain their computing infrastructure in the past few years. This, in turn, has reduced costs for organisations that do not need internal IT departments to constantly update applications, decommission hardware or software that is outdated, or use up limited computer storage space.
Cloud accounting software is also more secure, making collaboration so much easier, and has been critical for organisations moving towards a workplace that is more friendly to flexible work arrangements. Cloud-based software as a service (SaaS) tools have enabled finance professionals to work from anywhere easily. Being tied to a desk or a building where systems are housed is a thing of the past.
For further information, read our article on cloud vs. on-premise accounting software.
Robotic process automation (RPA)
RPA is a fast and effective way to perform mundane, repetitive tasks and free up human workers to add value in other ways. An automated process can be set up before leaving the office, and the following day, everything is complete.
RPA is ideal for businesses that experience large volume spikes during the year, are growing quickly, or wish to reduce the time valuable staff spend on processes where they can't add value. With RPA, there is an opportunity to complete far greater volumes in bulk, leaving the team to deal with the more complex cases.
This level of fast, reliable, accurate execution applied to multiple standard finance team processes makes sense from an efficiency perspective and makes compliance much more effortless. RPA can be programmed to deal with complex regulations; as the sheer volume of regulation continues to stack up in many sectors, this can only be good news. The phenomenal processing speed afforded by introducing the right RPA solution enables businesses to reduce costs and eliminate errors, freeing up finance teams to be more strategic and valuable to their organisation.
Artificial intelligence (AI) and machine learning (ML)
Some say AI and ML will be the next stage of human evolution – machines that can be deemed 'smart'. It is fair to say that any organisation not actively using AI is already behind its competition.
Many software as service (SaaS) vendors incorporate generative AI capabilities into tools designed to automate finance functions.
AI has been on everyone's lips in the finance sector in the wake of ChatGPT's breakthrough into the mainstream. For those not in the know, ChatGPT is the AI chatbot by Microsoft-backed OpenAI that took the world by storm after its public release, with a record-breaking 1 million users within one week of launching alone. The New York Times declared it the best artificial intelligence chatbot ever released.
Other companies were quick to unravel their own generative AI tools to capitalise on this success. Microsoft announced its AI-powered Copilot, powered by ChatGPT. Finance professionals can use Copilot to generate their documents, emails, presentations, etc.
Blockchain
Blockchain is a secure digital distributed ledger across a network of computers worldwide. It is known for its connection to Bitcoin and other digital currency. Today, global financial institutions are making digital payments in real-time across borders and incorporating different currencies and regulations thanks to Blockchain.
Blockchain is an enabler for businesses of all sizes as it facilitates transparency within the digital space. Put simply; it is no longer necessary for a company in the financial services sector to have built up a brand over decades to be trusted by consumers. Blockchain is secure, transparent and auditable, enabling smooth processes and speeding up payment through automation.
On a practical level, Blockchain technology can secure contracts, removing the need for the traditional finance team sitting in a physical office looking at paper copies of contracts and enforcing terms.
Every stage of the contractual process, from set up to approval to payment or credit terms, can all be done remotely using this new technology. Not only are physical barriers removed, but so too are the international ones that previously added practical complexities to the process.
Big data
With the increasing availability of big data, data analytics is becoming an essential tool for financial professionals. Data means so much more for modern businesses than Excel spreadsheets and figures. It now includes unstructured data that is analysed through natural language processing. With big data, financial information is monitored using real-time analytics to provide status updates.
The Fourth Industrial Revolution is fuelled by big data analytics, meaning other new technologies transforming finance use data as fuel.
Big data helps finance teams gain financial performance insights, identify key areas for improvement and make better-informed decisions. Big data can help accounting and finance professionals analyse cash flows, identify customer behaviour trends and predict future market conditions.
Predictive analytics
Predictive analytics is a rapidly growing area for finance businesses. Predictive analytics in finance enables greater data-driven decision-making, leveraging financial data to predict what will happen next. Keeping up with billions of transactions and extended supply chains at the speed at which business needs to be conducted today is only possible with predictive analytics.
Predictive analytics helps finance stay on top of massive volumes of data, facilitating dynamic analysis to build accurate forecasts, discover new opportunities, minimise risk, prevent churn and identify where action is required before potential problems impact profitability.
In summary
Emerging technologies in finance are becoming commonplace. Robotic process automation, artificial intelligence, big data, cloud computing, and predictive analytics, amongst others, are helping finance teams drive better results.
Accounting software can be integrated today in ways that have not been possible before; underpinned by transparency and far superior accuracy, confidence can be built more quickly than ever. With the arrival of unprecedented computing power and sophisticated analysis techniques, insight and decision-making, exciting new opportunities are opening to the finance and business leaders of the future.
The big question facing successful CFOs today is how the finance function will engage with new technologies. Answering that first requires a clear vision and a digital transformation strategy incorporating financial industry tech trends, enabling them to work more effectively and better manage enterprise performance.
Our best advice is to get ahead of emerging technology in finance and stay ahead. You can start by equipping yourself with cutting-edge financial management software today to avoid being left behind.
