The Future of Finance and Accounting:

:
Accelerating Digital Transformation in a Time of
Crisis

Second Quarter 2020

Introduction

Alain Mulder
Senior Director Europe Operations
Institute of Management Accountants (IMA)
amulder@imanet.org
Non-profit IMA® (Institute of
Management Accountants)
is the leading association of
accountants and financial
professionals in business.
IMA’s global footprint
IMA was founded as a non-profit in 1919 in the US and has grown into a
global organization:

➢ Over 140,000 members in

more than 130 countries
➢ 10 global offices
➢ 360 IMA chapters
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providers globally
Use IMA resources to strengthen your self

IMA’s wide range of resources is

Research & Publications Global Community your asset in building a stronger
team and a better business.

Certifications Soft Skills Development

Continuing Education Career Resources

What We Will Talk About Today

Introduction, Key Messages

The Value Chain Goes Digital – For Consumers and

Businesses
Evolving Competencies for Accountants

IMA’s Role in Advancing Competency in a Digital Age

The Call to Action

6
IMA Is Committed to Keeping You Relevant!
Automation has been around for a long
time. Now, amid COVID-19, the urgency
to automate has never been greater.

Relevance depends on competency and

talent. Technology is secondary to
people and process.

We must upskill in strategy management

and data science.

We must recognize what is at stake –

our relevance and influence in a fast-
moving Digital Age.

7
COVID-19 Puts Digital Transformation in Hyper-
Drive

8
Today, IMA Asks “Are You Fit for Purpose in a
Digital Age?”
• New technologies will result in the
elimination of many management
accounting positions.

• They will also have the potential to

create new ones.

• The key will be a shift, from financial

reporting and stewardship to becoming
a business partner and strategic
enabler.

• Successful management accountants

will enable the organization to perform
better.

Source: “Management Accounting Competencies: Fit for Purpose in a Digital Age?” IMA, 2019 9
How Did We Get Here?

1700s 1800s 1900s Today

First Second Third Fourth
Industrial Industrial Industrial Industrial
Revolution Revolution Revolution Revolution

Mechanical Electrical Automation Digitalization

Using steam and Electricity Information Internet of
water to power the enables mass technology Things and
first factories production ends reliance data create
on manual interconnected
labor globe

Source: “Finance 4.0 and key digital enablers,” E&Y, February 10, 2020 10
Evolving Role of Finance and Accounting
Current State Future State
Focus on efficiency Focus on responsiveness
and compliance and insight

Integrated value chain

Next-gen ERP Analysis
Blockchain
Analysis Data and analytics

Controls and Controls and

Verifications Verifications

Real-time data
Machine learning Transaction
Process automation Processing
Transaction Processing
Skills innovation

Source: “Finance 4.0 and key digital enablers,” E&Y, February 10, 2020 11
New Set of Collaborators for The Finance and
Accounting Team

Source: “Finance Redefined,” Workday, 2018

http://www.cfothoughtleader.com/wp-content/uploads/2018/11/workday-finance-redefined-longitude-190718.pdf 12
CFOs’ Changing Roles: Less Compliance, More
Strategy
Functional teams and activities under CFO
oversight
More report
2018 2016
responsibility over:
• Risk Risk 67 64
• Corporate strategy Internal audit 58 n/a
• Investor relations
• Board engagement Corporate strategy 51 36

Investor relations 46 33
Fewer report Reg-Compliance 46 55
responsibility over:
• Regulatory Enterprise transformation 44 n/a
compliance Pricing: Goods and services 43 n/a
• M&A – transactions
Board engagement 42 24
and executions
M&A process 42 52

M&A strategy 39 38

Source: “The New CFO Mandate,” Mckinsey Survey, December 2018 13

The Value Chain Goes Digital
Finance and Accounting 2020 Trends
• The skills gap will continue to
increase in 2020 as the battle to find, “The Learning
attract, and retain workers intensifies. Worker”
• The future of digital finance is
intelligent automation. RPA is
yesterday’s news.

• Transformational technology will

create a new digital finance
workforce, with an emphasis on the
learning worker.

• By adopting a futuristic mindset,

CFOs will become the digital officers
and business leaders of tomorrow.
Source: Imagining the Future of Digital Finance: 2020 Predictions,” Financial Executives International,
January 2020
https://www.financialexecutives.org/FEI-Daily/January-2020/Imagining-the-Future-of-Digital-Finance-2020-
15
Pred.aspx
Confusion Around What New Technologies
Mean and Can Deliver
Artificial Intelligence (AI): Systems that learn at scale,
reason with purpose, and interact with humans naturally.

Machine Learning: A subset of AI that uses statistical

methods to improve with experience.

Blockchain: An incorruptible ledger of identities,

transactions, documents, and assets offering a new way to
record, store, and share data of all kinds.

Sources:
https://www.forbes.com/sites/andrewarnold/2018/09/05/blockchain-is-not-a-threat-to-accounting-its-an-opportunity/#57d0e7fc57b9
https://www.forbes.com/sites/bernardmarr/2018/02/14/the-key-definitions-of-artificial-intelligence-ai-that-explain-its-importance/#64c4f8334f5d
https://www.cio.com/article/3236451/business-process-management/what-is-rpa-robotic-process-automation-explained.html
https://www.ephesoft.com/rpa-2017-ipa-intelligent-process-automation-next-frontier-2019/ 16
https://towardsdatascience.com/unleash-the-value-of-process-mining-4e3b5af4e9d8
Confusion Around What New Technologies
Mean and Can Deliver

Robotic Process Automation (RPA): An application of

technology, governed by business logic and structured
inputs, aimed at automating business processes.

Intelligent Process Automation (IPA): The move from

robots performing repetitive tasks to ones that are
“intelligent” (i.e., can learn and become independent
agents).

Process Mining: Analyzing vast quantities of data to get

a complete and objective picture of processes.

Sources:
https://www.forbes.com/sites/andrewarnold/2018/09/05/blockchain-is-not-a-threat-to-accounting-its-an-opportunity/#57d0e7fc57b9
https://www.forbes.com/sites/bernardmarr/2018/02/14/the-key-definitions-of-artificial-intelligence-ai-that-explain-its-importance/#64c4f8334f5d
https://www.cio.com/article/3236451/business-process-management/what-is-rpa-robotic-process-automation-explained.html
https://www.ephesoft.com/rpa-2017-ipa-intelligent-process-automation-next-frontier-2019/ 17
https://towardsdatascience.com/unleash-the-value-of-process-mining-4e3b5af4e9d8
New Finance Supply Chain Schemes
HSBC Partnership with Cainiao

• HSBC partnered with Cainiao

(Alibaba’s logistics arm)
• Enable merchants in Hong Kong
who sell their products on Tmall
(Alibaba’s e-marketplace) to apply
for financing of up to US$500,000
without the need for collateral or
financial documents

JDH Leverages Mobile and Blockchain

• Chinese fintech startup JDH

leveraged mobile technology and
blockchain to allow lenders to
finance suppliers several tiers deep
into various complicated electronics
manufacturing supply chains based
on the buyer’s creditworthiness.
Source: https://www.forbes.com/sites/lbsbusinessstrategyreview/2020/04/30/financial-supply-chain-in-the-covid-
19-pandemic-fuel-or-wildfire/#66a4ce4e6346 18
New Emphasis on Chief Data Officers
• Senior executives will need ready
access to both new and newly
critical data to make
unprecedented decisions in the
short term and inform
adjustments to their business
strategies and operational plans
in the medium to long term.
• CDOs must:
• Ensure organization remains
operational
• Lead solutions to crisis-triggered
challenges to come
• Prepare for the next normal (and
execute soon)

Source: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/how-chief-data-officers-
can-navigate-the-covid-19-response-and-beyond
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Data Taking on New Importance Amid Global
COVID-19 Pandemic

As of May 5, 2020

Data science – in particular, data visualization using

Tableau – is being used to understand and make informed
judgements to beat the COVID-19 global pandemic.
New Ways of Working
• Remote onboarding of CFOs

• Ability to collaborate across

technology platforms will be a key
attribute organizations look for in
new hires

• Remote working arrangements will

become more prevalent as time in
the office will be more restricted

• Soft skills like communication and

change management will be
increasingly needed to deal with
uncertain environments and
emerging challenges with unclear
solutions
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Use Case: Global Payments Platform Seeks
To Better Detect Money Laundering
Situation: A London-based global payments platform sought a smart
anti-money laundering anomaly detection to identify suspicious activity
across multiple payers and beneficiaries.

Source: “Anti-Money Laundering Case Study,” Applied Data Science, 2020

https://adsp.ai/case-studies/aml/
22
Strategy: Build A System To Identify Novel
Examples of Suspicious Behavior
Strategy: The company identified appropriate transactional, payer and
beneficiary data to create an algorithmic detection model and an
intelligent scoring system. Thirty-four distinct behavioral patterns can
be calculated for each payer to generate their risk score.

Source: “Anti-Money Laundering Case Study,” Applied Data Science, 2020

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Outcome: Analysts Can Prioritize Most
Problematic Payments
Outcome: Analysts can quickly identify, interpret and prioritize
problematic transactional patterns through the interpretable output from
the algorithms run against the graph database. The scoring mechanic
is flexible and adapts to identify the most problematic payments.

Source: “Anti-Money Laundering Case Study,” Applied Data Science, 2020

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Ethics in a Digital Age

“Technology is not neutral – it has values

embedded in its design and implementation.
Seemingly innocuous design choices can have
resounding impacts on people’s lives”*

*Source: “The Blockchain Ethical Design Framework,” Dr. Cara LaPointe, Senior Fellow
Georgetown University, Beeck Center for Social Impact + Innovation, September 18, 2019
https://blockchain.ieee.org/images/files/pdf/20180919-ethical-blockchain-design-and-implementation_-
_c-lapointe.pdf
25
Operating within an Ethical Framework
Digital technologies have challenged and changed professional norms. But
operating with a clear foundation of values can ensure positive outcomes.

Human
Dignity

Common Respect
Good for Privacy
Source: World Economic Forum, “The law can't keep up with new tech. Here's how to close the
gap,” https://www.weforum.org/agenda/2018/06/law-too-slow-for-new-tech-how-keep-up/ and
26
“Ethics for a Digital Age,” Vanacker & Heider
Seeing the Benefits and Drawbacks of
Technology like AI

Benefits Drawbacks
Reduction of errors Loss of jobs as human
previously made by humans / capital is replaced by
Frees up time for workers to software
focus on more strategic tasks
Cost of implementation
Shortened time on decision
Subject to learned bias and
making
prejudice
Ability to process large,
Inability to think creatively,
complex data sets quickly
which removes the critical
Savings over time from eye of management and
replacement of human capital auditors

Source: https://sfmagazine.com/post-entry/april-2019-ai-new-risks-and-rewards/ 27
Evolving Competencies for
Accountants
Data Science – Critical for Accountants to Deliver
Insight and Foresight
Statistics
• Ascending levels to describe, diagnose, predict,
and prescribe.
• Linear and multiple regression, correlation
analysis, hypothesis testing, goal seeking, and
more.
• No, accountants don’t need PhDs in stats, BUT we
need much more statistics to probe and ask the
right questions to discover answers in the data.

Data & Data Applications

• “Life beyond Excel” (R, Python, Tableau, BI)
• Data governance, data lifecycle, and data
architecture
• Should finance and accounting professionals
become coders?*

Business Domain
• Understand the business to know what problem to
solve
• Able to develop programs for intelligent solutions
*BLS data projects by 2020, there will be a three-fold shortage of computer scientists as reported in
“Inspiring young people to try computer science,” Star Ledger, July 14, 2019
29
What Was Old, Is New

2007
Good analytical capabilities require good
information management capabilities. But
analytics should not be equated with
analytical information technology. It is the
human and organizational aspects of
analytical competition that truly
differentiate.

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Balancing Technology and People
CFOs who strike the right balance between technology and people will be able to focus
on innovation, responding to the rapidly changing business context and driving the
business forward.

58% of respondents 47% of respondents

say that combining say their current
state-of-the-art finance function does
technology with not have the right mix
process improvement is of capabilities to meet
a major focus its future priorities

Source: “Finance 4.0 and key digital enablers,” E&Y, February 10, 2020 31
Data Analytics’ Graduate Programs, Degrees and
Concentrations

Some universities have a defined “Master’s of

Accounting Analytics” degree i.e. Villanova

Others offer graduate concentrations/tracks in data

analytics as part of a regular master’s of accounting
degree i.e. Case Western

Which program you should choose will depend on your

current experience and career goals

Source: “Discover Data Science” related academic programs

https://www.discoverdatascience.org/related-programs/accounting-analytics/
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Analytical Maturity in Finance Drives
Foresight for Business

Source: “The Future of Finance,” John Hugo, VP Financials Products - Workday 33

Five Distinct Roles for a Robust Analytics
Capability
Enterprise data scientists with experience in statistics and
quantitative techniques to build models underpinning analytic
initiatives

Data management professionals who can extract, clean, and

transform structured and unstructured data

Domain/sector practitioners who can define relevant

business issues and drivers

Data storytellers who know how to present the output of

analytic efforts

Technology application experts who can work with the

production tools needed to support analytics efforts

Source: “Analytics: Five skills that can help finance soar,” Deloitte, CFO Insights, January 2017
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IMA’s Role in Advancing
Competency in a Digital Age
IMA’s Enhanced
Management
Accounting
Competency
Framework

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CMA Exam Part 1 – Financial Planning,
Performance, and Analytics

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CMA Exam Part II – Strategic Financial
Management

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IMA Educational Resources and Thought
Leadership
• New research report “Strategic Analysis – Methods
for Achieving Superior and Sustainable
Performance” (April 2020)

• Ongoing Tech Talk webinars and online courses

centered on the latest tech trends

• Strategic Finance articles like “CFOs Respond to the

Pandemic” sharing perspectives on how CFOs are
facing the COVID-19 crisis (May 2020)

• IMA Data Analytics and Visualization Fundamentals

Certificate™ (March 2020)

• Collaboration with University of Illinois Gies College

of Business to offer “Beyond the Basics: Data
Analytics and Visualization for Accounting
Professionals” certificate (May 2020)

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COVID-19 Resources
IMA Small Business Committee
whitepaper on Planning During
COVID-19 (April 2020)
IMA and the Shanghai National
Accounting Institute (SNAI) survey
of finance professionals in China in
February 2020 about the challenges
of facing the COVID-19 public
health crisis
(May 2020)
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IMA Data Analytics & Visualization Fundamentals
Certificate™ Course
• Four module, online course
• Module 1: Becoming Data Driven
• Module 2: Visualizing the Present and Predicting the Future
• Module 3: Applying Data Analytics and Visualization
• Module 4: Conclusion
• Exercises are designed around real-world scenarios
• Content is based on IMA’s thought leadership
• Learn from the experts, online and at your own pace
• Earn a Professional Certificate, Digital Badge and 9 NASBA CPE credits

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CMAs Are Well-Positioned to Tackle Challenges

• Globally recognized certification

• Demonstrates a readiness to lead and
transform existing finance and
accounting functions
• Globally CMAs earn a median salary
that is 60% greater than non-CMAs
and a median total compensation that
is 63% higher*
• About 90% of all respondents holding
the CMA stated the certification gave
them more confidence to perform their
job at a high level
*Source: IMA’s 2020 Global Salary Survey
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The Call to Action
The Call to Action: Will Your Career Hit a Ceiling in
the Digital Age or Will You Grow in Relevance?

• For individuals – Adopt and adapt to

skills in artificial intelligence, robotics,
and intelligent process automation.
Upskill!!
• For academia – Raise the stakes in
better aligning what is taught vs. what
today’s “accountants” actually do.
• For corporations – Tone at the top in
embracing data analytics as the new
science of winning in a competitive
age full of disruption.
• For accounting associations – Be
part of the solution by advancing
competency with training and
education.

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Phone
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