While the principles of finance and accounting remain the same, the industry is constantly changing. The financial field today looks completely different from 30 years ago, as the internet and technology continue to change the face of investing and accounting.
Here are five ways the industry may change over the next few years, and how you can update your skill set to increase your chances of a successful accounting career.
Big Data is Making Accounting More Transparent
Big Data is changing the face of both finance and accounting. Software platforms collect and analyze industry trends, customer data, and third-party resources to instantly paint a picture of the current financial landscape. In fact, according to Forbes, more data has been collected in the past two years than in the entire history of the human race. Furthermore, by the year 2020, 1.7 megabytes of new information will be created every second for every human being on Earth.
If humans didn’t have the software to analyze all that data, financial analysts would be completely overwhelmed by the sheer amount of information available. Tech is an increasingly important part of finance-related work so analysts and advisors can prioritize the data they need and evaluate it without the noise of all the other collected information.
Technology is Automating More Accounting Processes
Automation is expanding into multiple elements of the accounting services industry, particularly in the B2B sector. Technology makes it easier to track expenses and balance books, reducing human error. Monitors and alerts let accountants know when their books are off or if their budget needs to be adjusted. Even internal processes are automated as daily reports are generated and emailed to executives.
Automation frees up time and resources to help companies focus on the bigger picture. Historically, a company might have a team of analysts who spend all day drafting reports. Now, they are generated with a few clicks and adjusted based on company needs. Accounting professionals are spending less time crunching numbers so they can focus on more important aspects of the job.
Skill Sets Are Shifting Toward Strategy
While automation is streamlining many aspects of the finance and accounting industry, it doesn’t necessarily mean that the demand for analysts, managers, and accountants is decreasing. Essentially, financial professionals have more time to handle the roles that robots and software programs can’t complete. For example, a bot can process data and report it, but humans still need to process what information the machine gathers and then give it context. Employees with strategy and critical thinking skills are in demand. This has led some financial and accounting professionals to return to school to improve their analytical thinking and leadership skills. Communication abilities are also in demand as financial analysts need to present their findings in a clear and concise way to upper management.
According to US News, 98 percent of employers believe business school graduates need to be able to use facts to drive decisions. Essentially, they need the ability to look at reports that machines generate and make business decisions based on that information. These problem-solving and critical thinking skills are emphasized in graduate accounting programs – like Maryville University’s online master’s in accounting program. Graduate learning helps prepare students for a career of strategic decision-making, and can clear the path to new and exciting careers.
Customers Are Interacting With AI Bots
Machine learning and artificial intelligence aren’t just changing B2B accounting. They are also affecting consumer banking and investing. According to VentureBeat, 51 percent of people believe businesses should be available to customers 24/7. Furthermore, 45 percent would rather talk to a company through messaging than through email or phone. Messaging via chat boxes and social media is a fast way to get your questions answered without spending time on the phone. To meet customer demand, more finance companies are turning to AI Bots to chat with customers.
Most AI chatbots aren’t able to completely solve the problems of their customers, but they gain information that helps customer care teams and bankers. For example, a chatbot could learn that a customer wants to open a Roth IRA or take out a loan to start a business. The bot can then transfer the customer to the right party for a smoother experience. Ideally, the customer care professional will already have a solution lined up for the customer before they even speak with them. This also reduces company operating expenses because the customer care team spends less time on calls and solves problems faster.
Crowdfunding and Peer-to-Peer Lending is on the Rise
Historically, people, businesses, and entrepreneurs sought out banks and credit unions when they were looking for a loan. For a boost to pay college tuition or seed money to start a business, an institution would negotiate an interest rate and payment plan for the money. However, the internet has ushered in a new option for lending, one that is consistently growing, crowdfunding.
According to the Massolution Crowdfunding Industry 2015 Report, this type of fundraising accounted for $34 billion, and $25 billion of that represented peer-to-peer funding. This source of financing is becoming popular with lenders and borrowers alike because it’s more affordable and the risk is lower. For example, if 100 people each invest $200 to get a business off the ground, the investor risk is lower than if one person or bank invested the full $20,000. When the risk is lower, the interest rate is lower, which means borrowers save money in the return process.
While banks are still major players in lending, crowdfunding is a growing alternative. Finance and accounting professionals might find themselves working at a tech startup or crowdfunding firm instead of a traditional bank after graduation. In this case, the job duties might extend beyond the traditional financial role. Employees could end up working closely with the customer service, development, and marketing teams.
Technology is changing the financial and accounting industries, but that doesn’t mean humans are less valuable. Conversely, industry experts are becoming more important than ever because they have critical thinking skills, ingenuity, and problem-solving capabilities. If you are interested in furthering your career in these fields, earning an advanced accounting degree can be an important first step. After all, on average, professionals with a master’s in accounting earn 37% more than those with a bachelor’s. To get started, visit Maryville University’s online Master of Science in Accounting program.