How automation is accelerating finance’s digital transformation for the better

Digital transformation has been underway in finance since as early as computers began. In North America, the digital transformation market is on track to be worth over $7.5 billion by 2025 after growing at a rate of 22.1% per year. Financial services are leading the pack, with 93% of organizations having implemented or currently planning a digital-first business strategy. 

But this transformation wouldn’t have been possible without the automation of repetitive administrative processes, driving forward the adoption of new technologies. 

Automation is already occurring in more places in your life than you probably realize. From auto-filling contact details to predictive text suggestions for emails, automation is creating the seamlessness we’ve come to expect from our digital experiences. 

While leadership is often keen, there can still be significant resistance from teams. Right now, the biggest roadblock is a lack of understanding of what is involved in automating and its short- and long-term benefits.

So, let’s dig deeper into how automation is accelerating finance’s digital transformation, its benefits, and how to overcome challenges to its implementation. 

Disrupting the incumbent 

Automated finance software-as-a-service is there to provide seamless and scalable digital experiences for both staff and customers. The change is a much-needed technological update to manual best practices, which often mean not reconciling every account and potentially missing any deviations.

While Excel may have previously reigned supreme, developments in software-as-a-service, cloud computing, and increasing demand for hybrid working are pushing the industry to evolve. After all, very few people like to cook on an open fire now that the kitchen oven has been invented — and the same goes for automated accounting software. 

Where an accountant might spend multiple hours working on comparative data sets, customized software solutions for different business types can create the same report automatically. SaaS reporting makes it possible to instantly compile comparative month-to-month and year-to-year data, making it easier for businesses to scale their operations, monitor their goal trajectory, and spot abnormalities. 

This is how automation aids workers. In this case, automation is doing the chore-like task of compiling data, so employees can then analyze the information with context in mind. For example, automation can help auto-reconcile accounts based on certain criteria, or prepare the amortization schedule automatically, and many other mundane tasks can be delegated to a machine.

Instead of crunching the numbers, looking at the data, and making charts, finance departments can use automation to gain back time. This is especially important as not every company can afford the luxury of a data analyst. Accountants in smaller companies can use the time freed from administrative tasks to reflect critically and communicate their findings, helping to focus and accelerate company growth with better-informed resource allocation. 

Securing resources 

Especially since the pandemic, digital transformation has flourished across industries, but budgets often go to front-end marketing and sales departments. Back-end finance and accounting departments that have been successfully ticking over for so long don’t often get the same resources for their digital transformations. 

However, remote working during lockdowns revealed deficiencies in digital processes that highlighted the need for investment. As a result, finance departments automated rapidly by roughly 199% from 2020 to 2021. 

The sudden requirement for widespread hybrid working and supporting cloud-based technologies became and remains a No. 1 priority for executives. Organizations said they planned to spend an average of $16.5 million in the next year on digital initiatives, with new technologies such as AI and machine learning, data analytics, and public cloud services being the most sought-after. 

Fostering a culture shift 

When over 60% of accountants are above the age of 40, it’s no surprise a culture shift has been one of the biggest hurdles to overcome for digital transformation. While leadership is usually on board once they see the potential financial gains, aging teams can be resistant to change. 

Workers may be hesitant to upskill and disrupt existing processes they believe to be working. Unlike younger, digitally native teams happy for the help, older workforces often complain that automation lacks transparency or could be avoiding learning new skills. They’ve yet to understand how automation can reduce the potential for errors that cause teams to stress and creates friction with clients. 

Chief financial officers are vital players in educating wider teams on the whats, hows, and whys of automation. Teams need to understand both the professional and personal benefits, to be more likely to accept changes to their work processes. Sharing reading material and creating opportunities to ask questions can be initial ways to break down barriers to implementation. 

There was much talk during the pandemic about how we could emerge into the “new normal” without falling back into bad habits. In the past, workplace stress caused nearly a third of employees to burn out, citing unrealistic deadlines or result expectations as causes. Automated solutions are only successful once employees see them as tools with which they can work smarter, not harder, to get the job done. 

With teams freed of repetitive tasks, management can maximize the value of this time by providing opportunities for learning and professional development. Companies could even develop team innovation training in alignment with their company goals, further maximizing the return on their SaaS investment. 

Ultimately, until employees understand the benefits for both the business and themselves, it’s hard for the industry to utilize automation’s full potential. However, with teams on board, automation is an opportunity to reduce costs, create more efficient and less stressful working practices, and help finance teams take a more predictive approach to company operations.