Will accountants one day be replaced by super-computers? If that seems far-fetched, then take a look at what is happening in financial advisory services, where online portfolio management systems such as Robo-Advisor are replacing professional investment advisors.
Customers are tired of paying through the nose for sub-standard investment solutions, when online solutions offer far greater transparency, lower costs and the ability to switch out of an under-performing investment in an instant.
Does the accounting profession face the same fate? Russ Alan Prince of Forbes magazine argues that accountants need to wake up to the stark reality of how disruptive technology will be to their professional lives. The good news is there is a silver lining in this dark cloud for accountants.
“Like all professionals, accountants are fungible (ie. replaceable). This is not to say that some accountants are superior to others, for that is certainly the case. The capabilities of individual accountants and the support they receive from their firms can certainly make a significant difference. However, if an accountant was to “disappear,” his or her clients can easily find a qualified replacement. What will happen when technology supersedes the core abilities of most accountants?”
Indicators of what is going to happen in the accounting profession can be seen in the financial advisor world. Today, there is Robo-Advisor 1.0. It is a relatively inexpensive way to deliver portfolio management. The major advantage of these platforms is scalability and lower fees that will appeal to price sensitive clients and be accessible to a broader array of potential investors.
Robo-Advisor 2.0 will incorporate cognitive computing and be able to deliver provide comprehensive, integrated technical solutions. Depending on client demand and the regulatory environment, this could encompass areas as far-reaching as financial planning, insurance, legal, accounting and tax, banking, and risk management services. The succeeding generation, Robo-Advisor 3.0, will incorporate process expertise enabling it to understand personal, financial, and lifestyle concerns and respond proactively, essentially creating a personalized family office.
It is highly likely that this same evolutionary path the financial advisory industry is taking will be replicated in the accounting profession. One of the biggest advantages the accounting profession has is a monopoly with respect to some of the services they offer. However, the question becomes the extent to which this monopoly can continue in the face of rising costs and the quickly increasing commoditization of accounting expertise.
As cognitive computing in professional arenas becomes normative, the majority of accountants will find the financial rewards associated with being an accountant increasingly out of their reach. They will either be replaced by smart machines or play a highly diminished role in the delivery of accounting services.
On the other hand, the astute, forward thinking accountants will leverage the technology to more effectively differentiate themselves by providing superior services at better rates. They will capitalize on artificial intelligence enabling them to offer a broad suite high-caliber expertise in a more transparent and highly cost-effective manner. This smaller cohort of accountants will reap the considerable financial rewards of a reborn accounting profession.
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