How Accountants Can Take Advantage of the Fintech Revolution

As Singapore positions itself to become a ‘smart nation’, technologies such as the Internet of Things (IoT), automation, and fintech are driving the way forward. According to UOB’s State of Fintech in ASEAN report, two in five—or 39 percent—of ASEAN fintech startups have chosen Singapore as their base of operations. 

Meanwhile, another report by the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Singapore Chartered Accountants (ISCA) attributes the rapid growth of fintech to the combination of government support, regulation, markets, capital, and talent.

Technology is changing accountants’ roles

Unsurprisingly, the rise of fintech, automation, and artificial intelligence (AI) has also affected the roles and responsibilities of accountants in Southeast Asia and the rest of the world. 

While there have been concerns about white-collar workers, including accountants, being displaced by the fintech revolution (according to a McKinsey Global Institute study, up to 800 million jobs could be automated by fintech by 2030), the reality is not all doom and gloom.

True, fintech and other similar technologies are enabling automation of accounting and financial management, especially at the small business level. But rather than removing accountants from the picture, fintech has paved the way for them to provide higher-level services that add even more value to their clients’ businesses.

Accountants are becoming business advisors

The speed at which accounting software continues to innovate has helped accountants move from routine tasks, such as number-crunching and filing tax reports, to offering advisory services and guidance to small businesses.

While the traditional aspect of financial accounting, such as compliance and payroll, are obviously important, many of these processes are increasingly being automated by software. And so, the accountant’s role has evolved from simply tracking these numbers to helping business owners glean meaningful and actionable insights from the data.

In fact, according to a report by jobs search engine Indeed, “business analyst” was the most in-demand financial profession among small businesses in 2017. This was followed by “business development manager” and “data analyst.” Interestingly, “accountant” was not in the top 10 of the list.

But this doesn’t mean accountants are becoming obsolete. Rather, their financial acumen is being redirected to where businesses need it most: strategy and decision-making.

Automation frees up time for accountants to provide higher-value services

Apps that automate budgeting, reporting, and forecasting liberate accountants from tedious administrative tasks, giving them the opportunity to focus on their core expertise and generate new business.

For example, AI and natural language processing (NLP) now make it possible for software to review convoluted legal contracts in hours—a feat individual auditors would have taken days to complete. 

From here, accountants are able to expand their repertoire into business performance services, such as business intelligence and growth profitability—entering territory traditionally occupied by the Big 4 accounting firms. 

In Singapore, accountants are looking into valuation analysis, tailoring their services to startups needing pre-money valuation before raising funds. According to Aberdeen Standard Investments, Southeast Asia is largely undervalued, showing an advisory opportunity for smaller accounting firms with the right tools to crunch numbers. 

Fintech also makes it possible for small practices to venture into strategic advisory services such as succession planning for family-owned enterprises and business planning for companies seeking to pivot into an industry, merge with a competitor, or get out of bankruptcy. 

By spending less time manually collecting financial information and more time with analysis, accountants can provide accurate and comprehensive interpretations of financial information to chart road maps for clients that leverage their strengths and mitigate weaknesses.

Providing advisory services on business growth and funding

With the advent of new technology, software, and practices, there may be a need to raise tactical changes in how accounting services are delivered. However, the core needs of clients remain relatively unchanged.

A survey by Intuit of more than 500 accountants and bookkeepers that sought to understand their primary challenges with small business clients revealed that accountants play a critical role in helping business owners grow their companies. For example, 57 percent said their small business clients needed guidance on basic cash flow management.

Accountants are also in the best position to guide businesses on complementary solutions like alternative sources of business financing, particularly invoice financing, microloans, and P2P lending.  It’s here where providers like Validus come in, leveraging technology in the underwriting processes to provide financing solutions with a turnaround time of as little as 24 hours. 

These emerging funding sources powered by fintech can provide much-needed financial relief to business owners who may not qualify for loans from traditional lenders. 

It’s here where accountants can make the jump to advising small businesses with cash flow issues, whether it’s by providing daily, weekly, monthly, or annual cash flow projections, or by directing them to sources of funding.  Accountants can come in by preparing comprehensive loan proposals for clients and coach clients on how to handle common questions asked by lenders.

Implications of the fintech revolution on accountants

Given the relationship between accountants and financial services, it’s not surprising that fintech is the source of both challenges and opportunities for the accounting profession.

While conversations about trends and technologies potentially displacing people from their jobs are often a source of tension and resistance, accountants should see this paradigm shift as a sign to take on more complex and strategic roles when working with their business clients. In other words, accountants need to see themselves as their clients’ partners, particularly during their growth stages, where their financial expertise is most needed.