The role of finance is one that continues to evolve constantly. With the evolution of technology and the rapid development we see in the Tech space, every industry is affected by this. Financial functions are slowly starting to move away from traditional methods of operations to more actions and processes being automated through software and machine learning. In this article, we will be looking at how automation has changed the official landscape of finance and accounting.
What is finance automation?
Although the term “finance automation” can include a wide range of practices, it is usually used to describe processes that aim to improve revenue. The majority of businesses who assess their current automation capabilities in this area rapidly realize that the current toolkit is not sufficient. New pricing models have grown rapidly, necessitating sophisticated, automatic, recurring revenue recognition capabilities that are significantly superior to those achievable using Excel or the out-of-the-box features offered by standard financial accounting software. Software for financial automation employs artificial intelligence and machine learning. It is employed in the creation of financial statements as well as in the administration of payroll, invoicing, and collections. Utilizing such automated software lowers the need for human interaction in these financial tasks, which is its main advantage.
The Evolution of Finance Automation
Finance automation hasn’t always been this way. When we take a look at how much it has changed we can assess how efficient functions have become. Technically when we speak about automation the first major step up for finance automation was when computers and the internet were made. In the 1950s and 1960s, little attention was paid to the application of AI in the financial sector. However, a significant portion of the mathematics employed in modern AI solutions dates back to the early 1900s. Before the 1950s, AI was never given official acknowledgement. At the Dartmouth Summer Research Project on Artificial Intelligence, led by John McCarthy and Marvin Minsky, the phrase “artificial intelligence” was first used in 19561. Despite widespread disagreement about accepted practices, the conference had a positive reaction overall. After World War 2, there was a significant increase in paperwork, which increased the demand for systems to automate some of the jobs. Researchers did, however, predict the possibility of job losses brought on by automation. Expert computer scientist Andrew Ng claims that neural networks first emerged in the 1970s, rose to prominence in the 1980s, and then lost steam. Today, however, there is a resurgence of interest as a result of the abundance of both organized and unstructured data as well as the spread of affordable computing power.
An award-winning mathematician named James Simons launched the quantitative hedge fund Renaissance Technologies in 1982, which was the first time artificial intelligence had a significant impact on the financial services sector. Renaissance had a market value of $165 billion as of April 2021. In order to estimate statistical probability for the trend in securities prices in any market, the company uses data from its petabyte-scale data warehouse. These mathematical models use large data analysis to make predictions by first examining non-random movements.
As we saw the internet develop over time then so did automation and making logging in data entry a lot more easier. Now we see automation at a point where artificial intelligence has revolutionized the way we approach certain tasks.
Benefits of finance automation
Less data entering work also means less money wasted. Employees must be recruited and trained to perform manual chores. Data entry is a laborious and time-consuming operation that can be done automatically using computerized processing and reporting procedures.
Finance Automation Trends
How is Finance Automation affecting job roles?
At Brisca we have the tools to take your financial department to the next level by working with multiple technologies that streamline and speed up the process. Contact us and let’s work on bringing you into a new age of finance and accounting procedures!