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A look at robotic automation in accounting and finance

Using information technology to make business processes more efficientis hardly a new idea - but robotic automation takes a significant stepbeyond this. In particular, this new breed of software promises (or threatens)to remove the human element from entire areas of high-volume, highlytransactional accountancy and finance work.  

Here, we consider its key features - and look at the challenges andopportunities it offers, both for providers of financial services, and fortheir clients.  

Robotic automation: a snapshot…

With “robots” that can capture, interpret and manipulate data,communicate across business systems and process transactions (among otherthings), this technology promises to revolutionise how business processes - andback-office work in its entirety - is carried out.

In the field of business accounts, Robot Process Automation (RPA) is theparticular strand of this technology that’s so far had the biggest impact. TheInstitute for Robotic Process Automation describes it as “technology thatmimics the steps of a rules-based, non-subjective process… [and is] able toconsistently carry out prescribed functions and easily scale up or down to meetdemand.”

So in a real-life context, this is the type of technology that has theability to replace human involvement for repetitive and frequent processes -but only if those processes are very clearly defined and do not require anysubjective assessment or evaluation. This includes the following type of tasks:

  • Using optical character recognition to electronically scan manual information onto an accounts system.
  • Automatic processing across multiple systems - thereby avoiding the need for humans to key in data from one system to another.
  • Error recognition and reconciliation. Using semantic reasoning, software has the capability of addressing the incorrect matching of data between different sources. In other words, the ‘robot’ is applying ‘judgement’ (albeit according to tightly defined rules).   

How RPA makes a difference to business…

The global robotics research community, Robohub.org highlights a number of examples of UKorganisations putting RPA to work. These include NHS Shared Business Services,which now has the ability to close 180 sets of accounting books at month end injust four hours. Likewise, Davies Group Insurance Claims uses a team of fourpeople to process 3,000 claims documents daily; before the implementation ofRPA, a team of 12 would have been needed to cover the same work.

Earlier this year, Deloitte’sassessment of process automation confirmed that the advantages of this type of technology go beyond justthe ability to do more work with less manpower. For one, there’s the bonus ofimproved accuracy: robots are programmed to follow rules and are effectivelyunable to deviate from those set parameters.

There’s also the benefit of improved organisational morale. On the onehand, if an employee’s role consists solely or mostly of transferring data fromone system to another, then such a role has the potential to be scaled back oreliminated completely by this type of software. But with this comes the abilityto relieve employees of some of the most onerous and monotonous tasks within acompany. Once these tasks are delegated to a robot, employees can focus on morerewarding areas of work.

Challenges and opportunities for the accountants and financial servicesprofessionals

The big question is over whether this type of technology would ever beable to take over the role of an accounting professional.

At this stage, it is most often put to work in those situations where nosubjective evaluation is required. However, once artificial intelligence isadded to the equation, there’s the potential to take it beyond methodical andrepetitive tasks, and into the realms of judgment and problem solving. Deloitteshowed how this is already happening in certain narrowly defined areas, such asdigital review and analysis of portfolio data by wealth management firms andemail monitoring by banks to identify noncompliant activities.

Yet even where the element of artificial intelligence is introduced,this tech is so far only ever being utilised to supplement the serviceprovided by the professional: not to replace it. For the time being atleast, the core value proposition of an accountant: professional tailoredadvice and the ability to consider a client’s requirements in their entirety -would appear to be still in place. 

Disclaimer

The content of this blog is of generalinterest and is not intended to apply to specific circumstances. It does notpurport to be a comprehensive analysis of all matters relevant to its subjectmatter. The content should not, therefore, be regarded as constituting adviceand not be relied upon as such. In relation to any particular problem whichthey may have, readers are advised to seek specific advice. Further, the lawmay have changed since first publication and the reader is cautionedaccordingly.

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