Over the years, technology has evolved at a rapid pace. With its constant growth, it is no surprise that emerging tech has impacted industries across the board in both negative and positive ways. The accounting and finance industries are no exception. In fact, these two fields have seen significant changes, especially in terms of streamlining operations.
Finance and accounting trends, in particular, have shifted over the years due to transformations in tech. One major finance trend in recent years has been the digitization of business operations and processes, such as recording transactions in a paperless fashion.
Regardless of your field or industry, it is essential to know top trends, particularly those related to new technology. Adapting to the current trends and processes will allow your organization to stand out among the competition while ensuring that you do not fall behind. Ignoring top trends within your field can be detrimental to your business.
With that in mind, here are some top finance and accounting trends in 2020 that you should keep a close eye on this year.
In an effort to promote efficiency and effectiveness among businesses, automation has already become a major finance trend and will likely continue to dominate in 2020.
Technological advances like artificial intelligence and machine learning, which are often used alongside automation, are not intended to push humans out of the equation completely. Rather, these types of technology are meant to improve performance and productivity by simplifying key processes. Furthermore, automating processes and operations also grants the ability to cut costs and yield even more positive results for an organization.
However, despite the various advantages of automating operations, especially streamlining processes that were once tedious, many companies across industries are reluctant to adopt this trend out of fear of the unknown and a lack of resources.
As business leaders explore this finance trend, it is important to remember that while artificial intelligence is a helpful tool in the automation process, the human mind is best equipped to fully interpret data and use common sense when drawing conclusions. Maintaining a smart balance of humans and machines will prove to be a great benefit to your business.
2. Financial Technology as a New Driver of the Business Model
In the past, breaking into the finance industry was not always a simple task for new businesses. However, with new finance trends and emerging technology, such as FinTech, or financial technology, it has become much easier for new businesses to make their way into the industry and become new drivers of existing business models.
Rather than leverage the advantages and benefits that come along with FinTech, some business owners fear FinTech companies and see them as a threat. Many businesses even perceive FinTech as a disruption to the way a business operates by competing with traditional financial methods in the delivery of financial services. Ultimately, this emerging industry uses innovative technology to improve activities in finance and penetrate the industry.
In 2014, global investments in favor of FinTech tripled, reaching over $12 billion. As banks and other financial organizations continue to focus a lot of their spending on IT services, it is clear that FinTech will continue to trend in the finance industry in 2020.
With blockchain, one distributed database can exist in multiple locations at the same time. When a user makes a transaction or changes to the data, the information is recorded into the database instantaneously. All stakeholders involved can see that change and access the information in real-time.
Blockchain is especially used in financial and accounting spaces, as this technology is specifically meant to underpin digital currency and distribute that information among stakeholders.
The emergence of blockchain has been revolutionary across industries. For example, transactions that once took hours or days to complete will now only take minutes — or even seconds — thanks to blockchain technology. Once a party makes a change to a transaction, everyone involved has the opportunity to validate and approve the change in real-time. The real-time component of blockchain is extremely beneficial as it provides an extra layer of security and improved transparency.
Blockchain will continue to prevail as a top finance and accounting trend in 2020 as financial organizations continue to protect their businesses with enhanced security measures.
4. Customer Intelligence
Customer intelligence is best defined as the knowledge a business has over the aspects that customers value the most. In the past, customer intelligence was solely based on lengthy surveys or focus groups, neither of which is enough to paint an accurate picture or provide data that is specific enough to a business’ needs. Today, however, we have access to immersive technology that can better assess and record customer intelligence, through social media and internet activity, for example.
As technology continues to evolve, customer intelligence capabilities will only improve, and companies will undoubtedly take advantage. Customer intelligence is a necessity when it comes to determining financial trends and customer satisfaction in today’s market.
5. The Insecurity over Cybersecurity
Moving data online most definitely comes with risks, and many business owners are well aware of this. In fact, many CEOs have voiced their concerns regarding the security of crucial business data and the chances of their business undergoing a cyber attack. Apprehension surrounding cybersecurity is likely to continue as a strong finance and accounting trend in 2020 as technology continues to evolve rapidly.
One way companies can resolve this fear is by paying more attention to trends in cybersecurity and staying up-to-date on new cybersecurity models. Taking the right measures can save your business from a cyber attack.
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