A recent story in The New York Times story sent shivers throughout the alleyways of downtown Manhattan with its bold headline, “The Robots Are Coming for Wall Street.” Conjuring images of Arnold Schwarzenegger, armed with scientific calculator and a mandate to snuff out armies of analysts, the story painted a picture of a not-so-distant future in which half of Wall Street loses their jobs to automation software.

Further evidence suggests that the phenomenon is unfolding beyond Wall Street, affecting the broad professional services sector. The Boston Consulting Group predicts that by 2025, up to one quarter of jobs will be replaced by either smart software or robots. A separate study from Oxford University suggests that 35% of existing jobs in the United Kingdom are at risk of automation in the next 20 years. Among the top 10% of  jobs most likely to be automated: insurance underwriters, tax preparers, loan officers, credit analysts, and accounting professionals.

Does that mean we’ll all be getting our tax advice — or, for that matter, financial and legal advice — from robots while we look for new jobs? In some ways, it’s already happening.  Robo-advisers have become a fixture in the financial services space, and automated tax preparation apps have been the subject of a tax season advertising blitz.

robo-accountants

Brian Peccarelli

While some of this transformation has already begun, the future of robo-enabled professional services is not quite as dystopian as the rebellion scene from Terminator or as stark as the research consultants have projected. Instead, we expect to see the industry evolve significantly as it increasingly marries powerful technology with the human element to create a hybrid — a cyborg if you will. This new breed of professional will be powered by big data and enhanced productivity tools.

Consider, for example, the impact of new artificial intelligence innovation on the current job market.  Last year, approximately 4.4 million IT jobs were created to support the types of big data and data science initiatives that power artificial intelligence development, generating 1.9 million jobs in the U.S. alone. It is projected that every big data related role in the United States will generate employment for 3 additional people outside of the IT function. That means over the next four years, 6 million jobs in the United States will be generated by these kinds of initiatives.

Clearly, this type of evolution will have a major impact on the day-to-day lives of professional services workers, upending many traditional ways of doing business, while making way for new ones to flourish. But, ultimately, the process will drive further growth across a wide variety of industries. Based on our work leveraging technology to help accounting professionals gain better insights, we see automation playing the biggest role in helping professional services in the areas of connectivity and information filtering and analysis, ultimately allowing accounting professionals to become more proactive rather than reactive in managing client relationships.

Some of the basic building blocks are already in place today. For example, in accounting, advanced document processing and secure document transfer portals now make it possible for accounting firm clients to directly upload all of their information through a secure file transfer. At the base level, this could sound scary. With many of the customer touch-points being automated, how can individuals and firms differentiate themselves and add unique value?

The answer is by inventing new, better touch points. The fact is, for every new technological advance that makes it easier for machines to handle mundane administrative tasks, a thousand new complex issues are cropping up for customers that they don’t quite know how to deal with.

Consider data from eBay which finds that more than 90% of U.S. businesses selling their wares using ebay.com are trading internationally. On average these businesses sell to 30 different countries. It didn’t used to be this way. Mom and pop businesses rarely sold outside of their own zip code just 15 years ago. Now, they need to contend with a tangled web of international trade and tax laws, government regulations, and compliance needs. These are precisely the kinds of areas that great human accounting professionals are ideally suited to address.

What that means is accounting professionals will be spending less time combing through spreadsheets and more time cultivating the kinds of valuable insights that will help their customers anticipate hurdles and alter course before those hurdles become real problems. They will also have to nurture a decidedly different skill set that will prioritize trust, creativity, communication, and interpretive insight over mathematical acumen, mastery of tax law, or old-fashioned bookkeeping proficiency.

Workers and the workplace will need to evolve to address the growing demand for training and constant retraining on new technology solutions and we will need to become extremely proficient in the soft skills, nurturing relationships with clients, co-workers, and partners to expand our influence.

Most of all, though, the major evolution for professional services firms and workers will be a laser focus on summoning the ghost in the machine — that insightful story that’s hidden among the data — and translating that insight into actionable information for clients. These kinds of insights are the keys to building trust, which is an attribute that’s sorely lacking in a purely robotic relationship.

Brian Peccarelli is president, Thomson Reuters Tax & Accounting.

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16 responses to “The Robo-Accountants Are Coming”

    • Cognitive, AI, machine learning and natural language processing will be the next complement to humans working in this domain, following Robotic Process Automation (RPA)

  1. While millions of tax professionals work hard to help their clients, they must prepare for the changes ahead. What you predict in your post is right on target and those who listen will be way ahead of their competitors. You are right on the mark as we are teaching the tax professionals we know what is happening that will affect their futures.
    Kat Jennings, TaxConnections CEO

    • This is encouraging to hear, because these technologies will revolutionize the way work is done for professionals across many domains. A common mis-conception is that it will displace workers, but that’s only going to happen if companies such as yours DON’T educate professionals to help them prepare. Glad to see you have a focus on this!!

  2. How quickly do you think the ERP systems will evolve to accept more parameters and inputs to be able to derive the accounting. For instance, taking an input to know a software license is good for 12 months so that it can automatically book it to a prepaid and then spread the cost over the 12 months.

    • Ryan, they can be configured to perform this rudimentary task already today, or have an integration point with a custom module that can take feeds of those assets, perform the accounting and pass the journal entries back.

      When we talk about AI/Cognitive Finance, it’s a whole new level of capability that’s replicating some fundamental human reasoning capability. E.g. automating cash application processes – learning from past exceptions how to match future exceptions with similar characteristics, so they don’t come up in the “human processors” queue any longer.

  3. The power for the accounting professional is understand what the business/organisation does. Fri. Then it is the advice and experience that will prove fruitful to the organisation. Transactional processing I’d already available with fancy reports.

  4. We are already building the AI for tax return planning. Tax Planner Pro syncs with bookkeeping software and can read tax return information to not only predict what next year’s taxes will be, but to suggest strategies to implement to lower your tax bill… Yes, the robots are coming, but they are being built by CPA’s….

  5. So if the accounting is “BAD” who do you sue. The Accountants or the Machine or everyone including the programmers.

  6. Don’t understand whether machines are being developed for welfare of man-kind or for its replacement. A line should be drawn as unfettered machanisation can only bring misery.

  7. Easier tasks such as reconciliation and invoice scanning are already standard in many systems today. The challenge is to create an cognitive AI to handle more complex judgement issues.
    In addition different countries have different tax systems and different accounting requirements making it hard/expensive to create software to handle different cases.

  8. The devil is in the details, I caught on this statement in this article: The fact is, for every new technological advance that makes it easier for machines to handle mundane administrative tasks, a thousand new complex issues are cropping up for customers that they don’t quite know how to deal with….. it means eventually trying to replace human interactions with technology creates the monster of extra costs for maintaining it, and over a long period of time it will amount to job cuts and lead to “Idle mind is devil’s workshop” scenario and second big monster of poor customer service due no human interactions, automated call centres are already a living example of this frustration we all experience daily as one cannot program every damn user experience – and again we try to perform reverse engineering and another layer of costs, also other monsters like accountability of work is already pointed out… I think we should use technology only to extent needed and not waste efforts in trying to over-use it. Thanks

  9. As a CFO, I see automation as a useful tool to further aid my LEAN implementation. The fewer humans, the better. It means less non-production wage expenses, less benefits costs and more productivity.

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