Over the past 2 years, migration to cloud-based platforms has been highly favored by numerous financial institutions. Financial Institutions such as hedge funds, private equity funds, and banks/brokerage firms have migrated to the cloud to support key business functions from human resources to payroll to the more recent move to front office systems. Another big move to the cloud has been for data management and most recently AI.
Moreover, cloud computing enables users to host applications and services over the Internet. There is a variety of technology that will shape the financial service industry in 2019. Some of the top tech trends for finance specifically in 2019 are: business intelligence and data and analytics technology that addresses IFRS 16/17, automation and continuous accounting, and Robotic Process Automation (“RPA”).
Business Intelligence and Data Warehouse technology that supports IFRS 16 and 17
The International Financial Reporting Standards (“IFRS”) 16 and 17 are new accounting standards that will take effect in 2019 and 2021, respectively. IFRS 16 and 17 covers standards for revenue and lease accounting. Financial application software that can support these new accounting standards will spark the interest of numerous financial institutions. Business intelligence and data and analytics including data warehouses will improve stakeholders’ decision making to provide consistent and accurate data.
A data warehouse focuses on creating a large pool of cleansed data gathered from a wide range of sources within an organization, that is used to help guide management and investment decisions. In addition, business intelligence and now AI and data mining tools enables users to analyze data and produce data to help executives, managers, and other corporate end users to make informed business decisions. There is huge enhanced efficiency potential in this area for financial services firms. For instance, companies with a large amount of billing transactions need to ensure that they have a smooth interface, as well as proper reconciling tools between peripheral systems, such as a billings to financial reporting system, when addressing those new standards (e.g. IFRS 16 and 17).
Automation and Continuous Accounting
Continuous accounting embeds automation, control, and period-end tasks within day-to-day activities, which aligns the accounting schedule with the rest of the business. In other words, it allows a firm to shorten its period-end close and gain real-time reporting analysis and awareness. Finance teams can distribute their workloads on-time and consistently throughout the accounting period. Continuous accounting is a form of automation that provides insights from real-time data to help improve the decision making for an organization.
Robotic Process Automation
Robotic process automation (“RPA”) is a form of business process automation technology that consists of software robots. Artificial intelligence captures and interprets existing applications for processing a transaction, analyzing data, and communicating between other digital systems. In other words, RPA automates manual tasks, manages workflow, and creates a standard process for complex organizations and IT infrastructure.
For accountants, it enables them to perform analyses in a timely manner, advise the business, and provide substantial financial data instead of producing tedious reports. According to Gartner, by 2020 73% of controllers will adopt RPA. Adopting RPA will remove manual processes that hinder the business while freeing up employees to address the more complex challenges and work on more value-add activities.
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About FinServ Consulting
FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.