From machine learning and algorithms that will write reports and analyse the data, to real-time data availability and increased digital interaction for the end user, financial reporting is about to become unrecognisable. A report by Deloitte, Reporting in a digital world, looks at the changes CFOs and other financial professionals can expect as the financial reporting function is increasingly automated. Here are some of the report's key takeaways:
1. Just 3% of time will be spent on creating reports
Finance teams currently spend 48 per cent of their time on creating and updating reports, according to a survey of 600 global finance leaders, although they would prefer to spend just 3 per cent of their time on this. They also spend 18 per cent of their time on interacting and communicating with the business but would prefer to dedicate much more time to this (69 per cent). They also spend 32 per cent on analysis of data and would like to spend a little less on this in future.
2. Cost and efficiency drive report automation
It's inevitable that financial reporting will evolve and will become far more efficient in the next five years. Cost will be an important driver according to the report, which states: “The savings companies can see as reporting evolves will be real and sustainable. Companies will be reducing human labor significantly – and delivering reports vastly more efficiently.” This greater efficiency will lead to potential for greater value creation, as the financial team's time is freed up to fulfil the role of storytellers and analysts, helping the company to interpret and gain insight into financial data.
3. Robotics, AI and chatbots mains technologies involved
Technologies that will be used to automate and improve financial reporting include:
- robotic process automation (RPA), which can automate routine tasks such as data manipulation;
- chatbots, allowing users to interact directly with data using voice or text queries;
- visualisation tools, which help users to display and play with data dynamically;
- artificial intelligence (AI), such as natural language tools that can read and write, as well as machine learning; and
- predictive analytics, a statistical technique using algorithms to execute forward-looking analysis such as routine financial forecasts.
4. AI will even write the report for you
AI tools will be able to actual write reports, at least the first draft, and will be able to provide insight as well as potentially remove bias from the process. Reports are no longer just dossiers of text and figures on paper; they're already being presented online and with their own multimedia web portals. This trend is set to develop as reports are presented through apps for phone and tablet, so that readers can interact with the data in numerous ways. Real-time reporting is also on the horizon. The report states: “The big barriers to that happening today are data quality and latency (i.e., the lack of timeliness). Fortunately, the future of reporting holds real promise for companies that want to take advantage of it.”
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