Development of Finance Technology in the Digital Age

in SteemLeo2 years ago

It is undeniable that technology has become a part of our daily lives. The rapid development of technology affects all aspects including the business world.
According to Gartner, in 2020, 30% of CIOs have started to incorporate the use of AI (Artificial Intelligence) technology in their investment plans.
For the next few years, traditional business models will evolve due to the impact of the emergence of new technology or the evolution of existing technology.
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The area of ​​finance is also inseparable from the impact of this technological progress. Things that are usually done manually have begun to be automated with technology.
Even things that had never been thought to be possible with the emergence of new technologies that can mimic the workings and thinking of humans such as RPA (Robotic Process Automation) and AI.

This happens because the demands of business development so that the company has more expectations from the finance team to have a greater role, which is to become a partner of the business, not just as a support team.

Technology helps release some of the capacity of the finance team so they can do more analysis and provide useful information to businesses.
With the help of analytics and AI applications to process and analyze data.

Initially the use of technology was more focused on the integration of business processes which also had an impact on the area of ​​finance (for example the implementation of ERP systems).
As an organization develops, the technology needed is not only the integration and automation of business processes but begins to move towards the value generated.
The technology selection focuses on what values ​​the technology can produce, such as:
• CFO Business Analytic tools that allow the finance team to analyze and simulate data more accurately
• Robotics (RPA) Cloud Technology for more efficient data storage
• In- memory technology that will speed up the presentation of reports and enable the presentation of data in real time

The use of some of these technologies will help raise the role of finance from Process Oriented Finance to Value Oriented Finance which can provide added value to the company.

How about Indonesia? Based on Accenture's research on CFOs and financial executives, the currently automated process of finance is only around 34% compared to other countries, which is around 60-80%.

But interestingly, for new technologies, approximately 73% of respondents in Indonesia said that they were interested in new things even though they were still in the exploration stage. This result is not much different from the response of 77% of respondents in CFO in developed countries such as America, China, Japan, Singapore and others. The use of new technology is on average still in the experimental phase. Some of the concerns felt by them in implementing the technology are:
• Data standardization
• Information security
• Technical errors and bugs in the system

Despite all these challenges or concerns, the survey results show that CFOs and financial executives in Indonesia remain optimistic about digital developments for the next 3 years compared to other countries.

If so, what should the CFO and financial executive do to prepare themselves? They have to start by upskilling the finance team to analyze data and also technological fluency.
Technology is no longer an ability that is only owned by the IT team but also by the finance team.
This does not mean that we must have the same capabilities as the IT team but at least have an understanding of technology so that it can help in carrying out its role as an effective business partner.

Keep in mind that the technology is only used as supporting media, but the ability to analyze and anticipate changes will remain a priority that must be considered by the finance function.