Despite evidence that embracing modern tech helps strengthen finance departments, only 1 in 10 appear to be taking a tech-forward approach, according to an AICPA survey. Issues holding respondents back include a reliance on legacy technology and security concerns.
Evolving tech is changing the nature of pretty much every role within your organization, although some are less prepared for the onslaught than others.
And, according to the Association of International Certified Professional Accountants—along with its two subsidiaries, the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants—the finance department might need a little more help than most. A recent study about tech’s role in finance, commissioned by the associations in tandem with the enterprise computing giant Oracle, reports that nearly 90 percent of organizations surveyed have yet to add any automation or artificial intelligence elements to their finance work, while just 10 percent of finance teams say they’re actually ready to take such work on.
The report, “Agile Finance Unleashed: The Key Traits of Digital Finance Leaders” [registration], makes the case that tech savviness is a key signifier of financial success.
“One factor preventing teams from better fulfilling this role is a lack of digital technologies in the finance function, including artificial intelligence,” AICPA Chief Executive of Management Accounting Andrew Harding said in the report. “Without these tools to automate mundane tasks, finance teams remain burdened with transaction processing, manual controls and compliance, leaving them little time to focus on business strategy.”
Some highlights from the report:
Those who aren’t savvy know it. While just 10 percent of organizations say their finance teams meet their technical ambitions, the numbers are particularly stark when comparing them to organizations that aren’t. More than 80 percent of “digital finance leaders” claim, respectively, that they’re offering compelling digital experiences and that they’re able to meet the public’s needs. This number falls to 30 percent or below in the case of those who aren’t tech leaders.
Legacy is a factor in slow tech innovation. Half of respondents stated that an unwillingness to re-engineer legacy finance processes was a major factor preventing automation from coming to finance—the second-largest barrier after data and information security concerns (63 percent). This led to a situation where 37 percent of organizations took in more data than they actually analyzed. However, the challenges of old processes are clear for many respondents: 73 percent of large organizations said they would work on their internal expertise, and 61 percent would work on improving their legacy systems.
The report also highlights examples of companies that it sees as digital finance leaders, including Instacart, Western Digital, and the Royal Bank of Scotland.