The complexity of accounting information systems continues to increase with the introduction of advanced technologies and new ways of doing business. Understanding how innovation is driving the industry is essential to forward progress.
The old image of what an accountant does is gone. The new conversation is about and how the role fits into the larger “fintech” (financial technology) ecosystem. Being educated in ongoing and emerging trends is extremely helpful in the field, as employers look for those professionals with the latest knowledge and expertise. If you are interested in working toward a master’s degree in accounting and pursuing a career in accounting, if you are informed on this subject, it could set you apart.
As such, the trends and predictions that are taking shape now will continue to accelerate the rate of change in accounting and accounting information systems. Some of these developments include:
According to research conducted by Capterra, an independent software analysis firm, approximately 40 percent of businesses now use a cloud-based accounting package. Reasons for the move to cloud computing include benefits applicable to both clients and employees:
• Increased efficiency and productivity
• Accessibility via mobile devices for remote users
• Integration across different platforms and applications
• Ease of collaboration across multiple locations and departments
• Availability of modular add-ons for specific accounting challenges
• Improved data protection offered by off-premises storage and security
Cloud-based solutions can also offer better user access and control mechanisms, helping to mitigate risk by putting a digital fingerprint and timestamp on every entry. Using this type of accounting information technology can achieve a more detailed audit of activities in a given system, at a particular point in time.
As data is made more available, opportunities and reasons to use cloud-based accounting systems will continue to grow. Accountants and firms that invest in technology improvements like cloud computing systems now will help to further modernize the industry to keep up with the rest of the world.
Big Data Online Services
In a world of Big Data, the entire accounting and fintech sector is in a maturation phase. The industry is still working to adopt new and innovative ways of thinking about data, as customers demand more and easier ways to get to their financial information online and on the go.
According to PWC, financial services firms– like banks, investment firms and insurers – are increasing their investments in Big Data and data management on a global scale. This industry is recognizing the power of collecting and utilizing data to improve services. As a result, there is a need to continue advancing beyond legacy systems to an agile environment where accounting data is leveraged to create personalized user experiences for conducting transactions, tracking cash flow, making capital investments, and more.
There is a treasure trove of financial data to be mined in order to get a clear and indisputable estimation of the big picture as it applies to fiscal health. As more aspects of business and consumer finances become digitized to suit our mobile and virtual world, there is an opportunity for better accounting decisions based on quantifiable objectives.
According to IBM, the world creates 2.5 quintillion bytes of data each day. Additional research suggests that we will be creating 50,000 gigabytes per second by 2018. That is far too much information for humans to process efficiently, regardless of industry and experience.
This is where artificial intelligence and “machine learning” emerge as a natural follow-up to the Big Data that is driving the evolution of accounting information systems. Previously manual tasks can now be digitized for improved accuracy, analysis, and compliance. Forward-thinking accounting leaders can help usher in a new era of productivity, where algorithm-rich software can complete time-consuming tasks.
As with other industries experiencing advanced automation – manufacturing, for example – there is a wariness against job loss to machines. However, the reality of such concerns can be much brighter as artificial intelligence also has the potential to boost productivity, company growth, and hiring opportunities.
With process-heavy work like audits, compliance reporting, account reconciliation, fraud detection, and predictive analysis being managed by computers, accountants can focus on more strategic functions and advisory roles that require a human touch.
A discussion of issues regarding financial cyber security is not new territory. Each year, companies of all types and sizes experience increasingly large data breaches that compromise the security of private information.
One of the mistakes that firms can make is relying solely on technology tools to stop security risks. Artificial intelligence can’t do it all. In this case, a human understanding of malicious tricks and threats is essential to success.
Cyber security experts know that hackers only come in through the “back door” a certain percentage of the time. In other instances, fishing scams and infected e-mail attachments allow entry into the system. There is also the off-chance threat of a culprit leaving a mysterious or unlabeled CD or DVD on someone’s desk or sneaking into a restricted area to remove physical records.
The target in all of these cases is the valuable cache of personal and financial data being stored. Anyone who works with accounting information systems would be well served to consider deploying a combination of cyber security technology measures (virus detection, firewalls, etc.) and company-wide education on security threats.
Remediation strategies also need to be integrated into any cyber security plan, in case of a breach from inside or outside of the company. Banks, financial firms, government agencies, nonprofits, and companies are all targets, no matter their size. It’s important to understand the available options and the cost-benefit of securing customer data and intellectual property.
Thriving in a Time of Change
The Greek philosopher Heraclitus famously said “change in the only constant in life.” Having the flexibility to adapt – in both skill set and attitude – is what will make the difference in the future of accounting and accounting systems.
Professionals who are energized about the new era we are in, as well as what lies ahead, have an opportunity to learn and thrive. Pursuing a Master of Accounting, even if your undergraduate degree is in another field, can make sense in creating a new tomorrow for the accounting industry and yourself.