Their arrival is long overdue, as is the massive shift financial services is about to undergo.
In a time where political and business leaders outspokenly fear and condemn automation as the ultimate workforce-killer, it is all too easy to become wrapped up in the notion that a robot will soon come for your job. As a finance professional, this fear is warranted. A recent study by McKinsey found that the financial sector has the technical potential to automate activities taking up 43 percent of workers’ time.
However, suddenly gaining back 43 percent of your time will not necessarily lead to a pink slip. According to a report by Equitable Growth, those working in business and finance fall amongst the most chronically overworked, with almost 40 percent regularly clocking in over 40 hours a week.
This intersection of overworked employees and automation-prone tasks is where robots enter the financial services industry. Their arrival is long overdue, as is the massive shift this field is about to undergo.
Within the last fifty years, the roles of financial analysts and accountants were taken over by repetitive and laborious tasks. Much of their time is designated for work that requires little critical thinking such as data entry and reconciliations—the manual tasks that are most susceptible to human error. The irony here is that finance staff were not taught to merely input numbers into a spreadsheet, rather they were trained to analyze data and make strategic recommendations to executives.
This is not to say the finance industry has been devoid of technological innovation. On the contrary, great advancements have been made since the introduction of ERP systems such as SAP and Oracle. At the same time, while the paper trails were transferred to screens and servers, accountants and analysts were still stuck doing the legwork of compiling and reconciling mountains of financial data. Even as things changed, they remained the same.
With the arrival of software robots, finance professionals can finally get back to what they were meant to do—strategic analysis to support their organization. The new wave of process robotics technology, commonly referred to as “software robots”, works by simply doing repeatable, rule-based tasks. However, these virtual robots are not just repeating human effort. They integrate completely with the existing ERP system to automate various finance processes end-to-end—not just at the User Interface.
With robots in the picture, there is no longer any reason for accountants and financial analysts to spend so much valuable time reconciling between ERP systems and ledger accounts. By fully automating processes laden with manual tasks such as revenue recognition and account reconciliation, robotics enables finance teams to execute these reports more frequently and spend more time on their analysis.
Robots will empower finance professionals to switch to the 80/20 model, where 80 percent of time will be spent in analysis and just 20 percent on production. They will still need to keep an eye on their robotic counterparts, but will be able to increase the time they spend analyzing reports exponentially. Ultimately, by being able to offer more strategic financial insights, they will be more valuable to the business, and find their roles more fulfilling. Finance professionals will see some relief around controls and audit as well, as these processes will be performed without error by the robot.
The biggest advantages of software robots in finance will be 100 percent accuracy, completeness and timeliness. The speed of processing data will increase substantially, as will the ability for the organizations to see root causes of error and change those processes.
At the end of the day, the question on everyone’s mind seems to be “What will I do with my finance teams as these processes get robotized?” As more and more business stakeholders have access to accurate, complete and timely data, not only will there be more finance positions available, but these will be transformational roles like data analysts, risk and controls managers, and business analysts. These roles fit perfectly with the new millennial workforce, which is more likely to embrace robotics as they are looking for more meaningful, value added work. So the bottom line is the human’s financial job will not disappear, rather the job will merely be altered.
Steve Palomino is Director of Financial Transformation at Redwood Software.•