94% of financial services professionals may be bluffing about fintech knowledge – are you one of them?
The accounting profession is undergoing its biggest technological transformation since the introduction of the personal computer, and accounting curriculums will need to be overhauled to keep up with the changing environment, according to one leading accounting institution.
Technology has transformed the accounting industry and will continue to do so in the coming years. However, concerns have been raised about the ability of accounting professionals to keep up.
According to a new survey by online training platform, FINTECH Circle Institute, 94% of financial services professionals suspect their colleagues of using buzzwords such as “Blockchain” and “Artificial Intelligence” without understanding their meaning. Over half, 60%, claim that such bluffing is a common occurrence.
This is not good news. The accounting profession is a vital cog in any modern economy, providing crucial information, which enables various stakeholders to make rational financial decisions. The profession also plays a crucial role in terms of holding government accountable on how it uses public funds.
Hence, as technology such as Blockchain and cloud computing advance to disrupt this sector, it will be imperative for financial professionals to ensure their skills are developed accordingly. According to Justin Kyriakou, international development manager at AAT (The Association of Accounting Technicians), a UK qualification and professional body for vocational accountants, which has a strong presence in Botswana, this imperative extends to training providers.
“We ensure that our accounting qualifications incorporate all the skills that professionals will need to meet the coming changes,” he says. “This includes communication skills, which are essential for building relationships with clients, and computing and IT skills to help individuals learn how to use new technologies and adapt as quickly as possible.”
Botswana’s accountancy profession has been held up as a beacon in Africa and its growing finance sector heralded as key to diversifying the country’s economy. As a result, there is a keen appetite to pursue a career in accounting, says Kyriakou. And thanks to exponential advances in technology, it is a career that is more exciting with more potential than ever, he adds.
Blockchain set to revolutionise the work of accountants
Many regard Blockchain technology, most well-known for cryptocurrencies such as Bitcoin that has been breaking all records in recent months, as the most significant disrupter of the accounting profession. According to Sean Stein Smith, an assistant professor at Lehman College
According to Nicolai Andersen, a partner at Deloitte, blockchain technology may represent the next step for accounting. Instead of keeping separate records based on transaction receipts, companies can write their transactions directly into a joint register, creating an interlocking system of enduring accounting records. Since all entries are distributed and cryptographically sealed, falsifying or destroying them to conceal activity is practically impossible. It is similar to the transaction being verified by a notary – only in an electronic way, says Andersen. Companies would benefit in many ways: standardisation would allow auditors to verify a large portion of the most important data behind the financial statements automatically; the cost and time necessary to conduct an audit would decline considerably and auditors could spend freed up time on areas they can add more value, for example on very complex transactions or on internal control mechanisms.
Andrew Williamson, AAT director of marketing and commercial, agrees that rapid technological changes will mean that the profession will have to change and adapt, but equally the new technologies will also bring new opportunities for accountants.
“With new technologies such as blockchain, accountants will be freed to spend more time adding value for their clients by doing more important and arguably more fulfilling things, such as helping clients to plan for the future,” he said. “This will change the kind of skills they need to get ahead in the industry – and training providers need to keep pace.”
The role of educators is key
Future accountants will increasingly need education in digital technology (including cloud computing and use of big data), globalisation (outsourcing of accounting services), and evolving regulations (tax regulation, new forms of corporate reporting, and integrated reporting regulation), says Muhammad Azizul Islam writing on the IFAC website.
Educational institutions will need to develop or incorporate new units, such as cloud computing, big data, digital technology, integrated reporting, carbon emission accounting, among others for accounting students. Professional accounting organisations, says Islam, should consult with universities to collate experts/lecturers in the new areas and run new courses. At the same time, universities should either invest in existing faculty members for training and learning or recruit experts to coordinate and lecture new units.
Unfortunately, at the moment, few institutions have developed curriculums for accounting students in line with their future needs, he says.
Africa is fertile ground
Predictions are that Africa will potentially be at the forefront of these shifts. The continent has been earmarked as fertile ground for cryptocurrency start-ups with South Africa, Botswana, Ghana, and Zimbabwe leading the way according to online news source Finance Magnates.
“These opportunities are therefore close to home for accounting professionals working in Africa,” said Williamson. “Undoubtedly, accountants well versed in blockchain and other digital disruptions will be better positioned to advance their roles in the future.”
According to the Fintech Circle Institute survey, 84% of respondents claimed that colleagues with advanced digital and fintech skills, but half the years of experience, are more deserving of promotion than a colleague who has been in the industry for at least ten years.
“Fintech knowledge is no longer a ‘nice to have’, but an essential asset for anyone working in financial services. Africa needs accountants and finance professionals who are up to date with current fintech trends and also understand how technology can be used strategically to transform the accounting profession,” concludes Williamson.