Finance 4.0 in a nutshell
Techwireasia | 13th June, 2019
TECHNOLOGY is been changing how businesses work and it is no different for the finance industry. To reap the benefits that technology can bring, financial institutions would have to understand not only the advantages of implementing a particular technology but also how it will impact their businesses.
Next generation technologies such as Robotics Process Automation (RPA), artificial intelligence (AI), and the internet of things (IoT) is driving the next industrial revolution – also referred to as industry 4.0. These technologies can also transform the finance industry with Finance 4.0.
With so many different types of technologies available, it is difficult to ascertain which ones will be best suited to your finance department.
Beyond understanding how a piece of technology works, companies need to keep in mind the impact of technology in relation to the regulations governing the finance industry.
At the Association of Chartered Certified Accountants (ACCA) conference in KL last week, Narayanan Vaidyanathan, Head of Business Insights at ACCA explained the key points financial services specialists should keep in mind when embarking on tech projects.
Aligning strategy: The most important thing is for the management of an organization to evaluate and agree on what they want to achieve. Instead of changing goals, he explained that companies should change their operations to meet the goals.
Building the business case: Companies then need to understand the cost of implementing a particular technology, and how it will impact the business. They need to identify if it’s the right point in time for the business to adopt a particular technology.
Appreciate the value of data: You can’t get the business benefit of analytics if your data quality is poor. It is important to maintain a good data quality. Often, organizations do one major data clean-up. However, there is not enough initiative for keeping the data clean.
Manage the organizational impact of technology change: Technology alone cannot solve problems arising from bad practices. It also cannot replace underskilled people. Before implementing a technology, companies need to recognize the inefficiencies in an organization and remove it from the processes.
Focus on talent and skills: Having the right people is still key. Technology can replace the mundane repetitive functions, but human interventions are still needed. People will take on the role of change management, to link analysis to actionable business processes.
Assess the impact of technology on governance and risk management: Tech can fundamentally alter how you do business. It is thus important to note how it will affect governance and risks in your organization. Ensuring that processes are still compliant with any regulations and policies is important.