Will robots replace CAs?
Should CAs be worried about machines replacing them, or is it more science fiction than science fact? Andrew Harbison finds out.
Automation is nothing new – the manufacturing sector has been replacing humans with machines for years. Cars used to be put together by a team of production line workers, each component assembled by hand. Auto factories are now a landscape of disembodied mechanical arms, whirring, welding and screwing vehicles together.
The UK Prime Minister’s industrial strategy identifies that the “UK makes less use of robotics and automation than most other countries in Western Europe". But it does not examine the next logical step.
With the rise of cloud computing, blockchain, artificial intelligence (AI), robo advisors and even accounting apps, should CAs and finance professionals feel under threat from this new army of machines?
A recent poll by jobs website WikiJob of graduates who are planning to pursue a career in accounting found that almost three-quarters (74%) are concerned that their role will be made redundant by automation in the next 20 years.
Are they over-reacting? Perhaps not, according to Steve Varley, Chairman and Managing Partner for the UK and Ireland at EY. During an interview with the FT last year, Steve spoke about how the increased automation of the audit process has led the Big Four firm to re-evaluate their hiring practices.
“Our graduate needs are coming down,” he said.
“We hired 650 graduates in 2010 and 1,200 graduates in 2015. Given the rate at which technology is speeding up audit, that number could drop by 50 per cent in 2020.”
During a speech late last year, Bank of England Governor Mark Carney gave a somewhat ominous warning about the impact automation can have on the jobs market.
He said that “every technological revolution mercilessly destroys jobs and livelihoods – and therefore identities – well before the new ones emerge".
However, he said that alongside the negative disruption caused by technological advancements they also provide “great benefits”, highlighting that “ever-greening skills and cooperative training will become more important than ever".
A survey by CareersinAudit.com found that just under half (49%) of respondents are worried that their roles could become obsolete as technology becomes more sophisticated.
A shift in skill set?
While a feeling of unease and concern can be felt around the topic of automation in the finance function, many accountants see the potential for processes to be streamlined and the opportunity for new skills to be learnt.
“This kind of process will provide far richer data and it becomes more of a value-add process rather than just churning out a set of management accounts every month,” said Stuart Kerr CA, CFO of Incremental Group.
“It allows better conversations to be had that can ignite positive change within a business.”
Former ICAS President Jim Pettigrew CA believes that the high-quality insights provided by leveraging big data and AI programmes will “move CAs even further up the value chain".
He continued: “It also leaves us with an opportunity to use automation to reduce the risk of manual intervention. It means we can automate many of the mind-numbing tasks that blight some CAs' early years in the profession and earned us the nickname of ‘bean counters’."
Stuart shares this way of thinking, saying that essential but “mundane” tasks will become automated, and it will be to the advantage of CAs.
He said: “What that does is free up the time, not just at a junior level but all the way up to CFO. The technology has effectively reduced the detailed burden, allowing time to be focused more valuably on interpreting and improving business performance.”
The benefits automation can provide in relation to time management is not lost on accountants. A recent poll by the Chartered Institute of Management Accountants (CIMA) of its members found that 83% of them support the idea of more automation if it saves time and money or helps with indecision in their organisations.
Respondents also believed that increased automation will lead to more efficient companies as a result of better automation and data analysis (62%), followed by a general up-skilling of the workforce due to the need for more advanced computer skills (47%).
The true impact of increased automation is still to be seen.
Do you think automation will affect your profession? Let us know in the comments below.