Predictions: 2019 is the year we must re-build public trust in finance

Predictions: 2019 is the year we must re-build public trust in finance

After a year littered with accounting scandals, the industry needs to start taking accountability, reliability, and transparency within finance seriously

Over the last 12 months there have been a number of high profile scandals centred on the audit and accountancy industries, the ramifications for which have gone far beyond the sector itself. The collapse of Carillion in the UK is estimated to have cost the taxpayer up to £150 million, while mainstream media have reported extensively on allegations of financial misconduct levelled at C-suite executives from well-known local and global brands.

As a result, debates surrounding transparency, reliability and accountability within finance are no longer confined to finance professionals, CFOs or industry watchdogs. Many companies are understandably concerned about shoring up investor trust in their financial reporting processes. However, heading into 2019, it may not be large-scale investors that businesses need to worry about.

Looking at the number of start-ups that race through multiple funding rounds to IPO, without ever turning a profit, one could argue that investors are just as concerned with future potential as what is happening now. Ultimately investors may not care about company reports as long as they can turn a quick buck – although of course they should.

Meanwhile, consumers are becoming much more aware of the risks associated with inaccurate reporting and bad audit practices. Often, they are the ones who end up ‘on the hook’ when failings within the sector impact savings, pension funds and other company investments they depend on.

The accounting and auditing industries will need to find a way to re-build trust, not only with investors or shareholders, but with a broad range of stakeholders who are more exposed than ever to the potential pitfalls of inaccurate reporting.

The year of the integrator: the new skills and job roles businesses will need to transform

The ubiquity of technology is changing the way businesses operate, but closing the gap between a specific sector and the contemporary technology industry can be challenging. Digital transformation will continue to top the agenda for most organisations in 2019, however what many won’t realise is how critical attracting and retaining the right talent will be to this process.

In order to stay relevant, businesses need to focus on recruiting individuals who not only have sector-specific expertise, but also the technical and soft skills required to implement the technology that will help their sector to evolve. These integrator roles will be hugely important in professions like accountancy, where new technologies have the potential to transform the accountant’s role and relationship with the rest of the business.

A major issue companies will continue to face in the coming months is that these skills are not yet available through traditional education paths. However, this represents an opportunity for the individual. Within finance, it’s likely that these roles will be filled by intelligent self-starters who seize the opportunity to become an expert – carving out a new role for themselves and defining a new category of finance professional.

The ethical implications of AI innovation

It is widely accepted that automation, AI and machine learning have the potential to transform the role of the accountant, freeing up time and talent which can be better used for financial forecasting and business analysis. However, as the industry strives to become more IT-centric, it is perhaps time to consider the down-stream implications of these innovations.

Today, AI has become a catch-all buzzword encompassing a number of different technologies. But consider for a moment what a truly intelligent, automated system could look like in a finance setting.

What if one day we develop algorithmic processes capable of making independent business decisions using real-time financial data? If that algorithm makes an error, who is at fault? Is it the algorithm, the person who fed the algorithm data sets – the person who designed the software? Or should the CFO ultimately be held accountable?

Clearly these questions will still be hypotheticals for many organisations. Nonetheless, they highlight the potential risk new technology could introduce to a naturally risk-averse sector. 2019 should be the year we start thinking seriously about the rules, legislation and regulation our industry will need to survive such innovation.

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