4IR and impact on Finance
Are you a finance professional looking to stay ahead of the curve in the rapidly-changing world of the Fourth Industrial Revolution (4IR)?
As the 4IR continues to transform our lives and work, finance professionals must adapt and develop new skills to remain competitive.
Imagine being at the forefront of the 4IR, equipped with the skills and knowledge you need to navigate this rapidly-changing landscape. By preparing for the 4IR now, you can position yourself for success and take advantage of the many opportunities that this new era has to offer.
Stay caught up in the 4IR. Please read our blog on what it entails and how Eduyush.com and help you leapfrog your career.
On this page
- What is the fourth industrial revolution
- how does the fourth industrial revolution impact jobs
- Key challenges and opportunities facing finance and accounting professionals
- Potential impacts of 4IR on finance and accounting
- Strategies for finance and accounting professionals to adapt to 4IR
- Certifications in 4IR for finance
What is the Fourth Industrial Revolution
The Fourth Industrial Revolution (4IR) is a term coined by Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, to describe the current trend of integration of advanced technologies, including artificial intelligence, the Internet of Things, and robotics, into various sectors of society.
This integration is expected to lead to significant disruptions and transformations in our lives and work.
The 4IR is considered the fourth major phase of the Industrial Revolution. The phases are
- First: mechanization through water and steam power.
- The Second: mass production using electricity.
- The Third: Automation and digital technology.
- And the 4IR is the fourth. The speed and scope of the occurring technological changes distinguish it.
The 4IR is expected to bring challenges and opportunities and will require careful consideration of these technologies' ethical, social, and economic implications.
How does the fourth industrial revolution impact finance jobs
The Fourth Industrial Revolution is changing the way work is done. Are you prepared for the changes?
The impact of the Fourth Industrial Revolution (4IR) on jobs is expected to be significant, as the adoption of advanced technologies such as artificial intelligence, the Internet of Things, and automation is likely to lead to changes in the way work is performed and the types of jobs that are available.
A number of studies and reports provide some insight into the potential impacts of the 4IR on finance professionals.
- A report by the World Economic Forum estimates that as many as 85 million jobs could be displaced by automation and the integration of advanced technologies into the workforce by 2025.
- McKinsey estimates that as much as 50% of the work currently done by finance professionals and accountants could be automated using existing technologies. However, the report also notes that this could lead to new roles and opportunities for finance professionals who can adapt and upskill.
- A report by PwC estimates that as many as 10% of jobs in the UK could be at high risk of automation by the early 2030s, while as many as 20% of jobs could be significantly transformed. The report notes that the finance industry is expected to be among the sectors with the highest level of automation.
Key challenges and opportunities facing finance and accounting professionals
The Fourth Industrial Revolution (4IR) is expected to bring challenges and opportunities for finance and accounting professionals. Some key challenges that finance and accounting professionals may face in the 4IR include:
- Automation of tasks: Adopting advanced technologies such as artificial intelligence and automation may lead to the automation of specific tasks, potentially leading to job displacement for some finance and accounting professionals.
- Changes like work: The 4IR may lead to a shift in the types of skills in demand, with an increased focus on higher-level skills such as problem-solving, critical thinking, and creativity.
- Disruption of traditional business models: The 4IR may lead to the emergence of new business models, such as the sharing economy, which could disrupt traditional industries and potentially impact the demand for specific finance and accounting services.
- Data privacy and security: Cybersecurity risks may increase with the greater reliance on digital technologies, requiring finance and accounting professionals to be vigilant in protecting sensitive data and systems.
On the other hand, the 4IR also presents opportunities for finance and accounting professionals to adapt and thrive in the new economic environment. Some key opportunities include:
- Improved decision-making: The availability of large amounts of data and artificial intelligence can help finance and accounting professionals make more informed decisions, leading to improved outcomes.
- More excellent connectivity: The Internet of Things (IoT) allows for the interconnectedness of devices and systems, enabling more excellent communication and collaboration among finance and accounting professionals.
- New job opportunities: The 4IR is likely to lead to increased demand for finance and accounting professionals with advanced skills in data analysis, machine learning, and blockchain, offering opportunities for career advancement and higher salaries.
Overall, finance and accounting professionals must adapt proactively to the challenges and opportunities presented by the 4IR by continuously learning and upskilling, embracing new technologies, and staying up-to-date with industry trends.
Potential impacts of 4IR on finance and accounting
We look at four key areas where 4IR is having an impact.
1. Automation of tasks and use of artificial intelligence in financial analysis and reporting
Artificial intelligence and automation are increasingly used in financial analysis and reporting to streamline processes and improve efficiency. There are several ways in which AI can be used in this context, such as:
- Data collection and cleansing: AI can gather and organize financial data from various sources, such as company financial statements, market data, and news articles. This can help reduce the time and effort required to prepare financial reports.
- Financial modelling: AI can be used to build financial models and projections, which can be used to forecast future performance and make investment decisions.
- Fraud detection: AI can identify unusual patterns or anomalies in financial data that may indicate fraudulent activity.
Some examples of companies using AI in financial analysis and reporting include:
- BlackRock: BlackRock, a global investment management company, has developed an AI tool called Aladdin that helps it analyze financial data and make investment decisions.
- PwC: PwC, a professional services firm, has developed a GL.ai, an AI tool that helps it detect and prevent financial fraud.
2. Changes in work, including an increased focus on higher-level skills and decision-making
As automation and artificial intelligence become more widespread, the nature of work will change in several ways. One such change is that there may be an increased focus on higher-level skills, such as problem-solving, decision-making, and creativity, as these are areas where machines are less capable than humans.
For example, some companies are using AI to handle routine tasks and freeing their employees to focus on more complex and creative work. This could involve tasks such as data entry, customer service, and scheduling, which can be time-consuming and repetitive for humans.
Another potential change is that there may be an increase in the number of jobs that involve working with technology as more and more industries adopt AI and other digital technologies.
This could include roles such as data scientists, machine learning engineers, and AI developers, as well as jobs that involve using and managing these technologies.
Some examples of companies that are using AI to free up their employees to focus on higher-level skills include:
- UiPath: UiPath is a company that provides software for automating business processes. Its products allow companies to automate data entry, customer service, and scheduling tasks, freeing their employees to focus on more complex and creative work.
- KPMG: KPMG is a professional services firm that has developed an AI tool called KPMG Ignite, that helps it analyze financial data and improve the accuracy of its forecasts. This frees up its employees to focus on more complex and strategic work.
3. Use of blockchain and other emerging technologies in financial transactions and record-keeping
Blockchain is a decentralized digital ledger that records transactions across a computer network. It has the potential to revolutionize financial transactions and record-keeping by providing a secure, transparent, and immutable record of data.
There are several ways in which blockchain and other emerging technologies are being used in financial transactions and record-keeping, including:
- Trade finance
- Supply chain management
Read our comprehensive blog on How to use Blockchain in accounting? Benefits
4. Potential disruption of traditional business models and the emergence of new ones
The adoption of emerging technologies such as artificial intelligence, automation, and blockchain has the potential to disrupt traditional business models and lead to the emergence of new ones.
For example, AI and automation could create new business models that rely on technology to provide goods and services more efficiently and at a lower cost. This could involve companies using technology to automate processes, reduce labour costs, and increase productivity.
Some examples of recent companies that are disrupting traditional business models and developing new ones using emerging technologies:
- Lemonade: Lemonade is an insurance company that uses artificial intelligence and machine learning to underwrite policies and handle claims. This business model has disrupted the traditional insurance industry by providing a more efficient and convenient way for people to purchase insurance.
- Breeze: Breeze is a blockchain company that facilitates peer-to-peer car rentals. This business model has disrupted the traditional car rental industry by allowing individuals to rent their vehicles to others.
- Nuro: Nuro is a company that is developing self-driving delivery vehicles. This business model can disrupt the traditional delivery industry by providing a more efficient and cost-effective way to deliver goods.
Strategies for finance and accounting professionals to adapt to 4IR
Are you worried about the potential impacts of 4IR on finance and accounting?
You’re not alone. 4IR has a massive impact on industries worldwide, and finance and accounting are no exception.
However, that doesn’t mean professionals in these fields are powerless to adapt. There are several strategies they can adopt to stay ahead of the curve.
1. Continuous learning and upskilling
One of the essential strategies for finance and accounting professionals to adapt to 4IR is to engage in continuous learning and upskilling. This could involve taking courses and training programs to learn new technologies and skills, such as machine learning, data analytics, and blockchain.
Eduyush.com, in association with AICPA and ACCA, offers a wide range of 4IR certifications in subjects such as data analysis, RPA, cybersecurity, and blockchain.
2. Embracing new technologies
Finance and accounting professionals should be open to learning and using technologies that may be relevant to their work, such as artificial intelligence, automation, and the Internet of Things. This may involve experimenting with different tools and software and seeking opportunities to gain hands-on experience.
3. Staying up-to-date with industry trendsFinance and accounting professionals should make an effort to stay informed about the latest developments in the 4IR and their implications for the finance and accounting industry. This may involve reading industry publications, attending conferences and workshops, and networking with colleagues and industry leaders.
The Association of International Certified Professional Accountants and the Financial Management Association regularly publish articles and research on industry trends and the impact of the 4IR on finance and accounting.
4. Emphasis on higher-level skills
As automation and AI become more prevalent, finance and accounting professionals will likely need to focus more on higher-level skills, such as problem-solving, decision-making, and communication, as these are areas where humans are generally better than machines.
Overall, the Importance of continuous learning and upskilling must be considered in the context of 4IR. Finance and accounting professionals who can adapt to new technologies and develop new skills will be well-positioned to succeed in this rapidly changing environment.
What are the certifications which will be the most beneficial to take for a finance professionals
Are you looking to upskill in order to stay ahead of the curve in 4IR?
With our suite of finance and accounting certifications, you'll be able to harness the power of 4IR for your career advancement. These certs will give you an edge over your peers and set you on a path to long-term success.
We list down some of the most in-demand certifications.
- Data analytics: In the age of 4IR, data is a crucial asset for businesses, and the ability to analyze and interpret data is critical for finance and accounting professionals. Courses in data analytics, such as those that cover topics like SQL, Excel, and data visualization, could be highly beneficial for accountants looking to adapt to 4IR.
- Robotic process automation (RPA): RPA is a technology that allows businesses to automate repetitive tasks by using software bots to mimic the actions of humans. Courses in RPA, such as those that cover topics like process design and bot development, could benefit accountants looking to use this technology to streamline processes and improve efficiency.
- Blockchain: Blockchain is a decentralized digital ledger that records transactions across a computer network. Courses in blockchain, such as those that cover topics like distributed ledger technology and smart contracts, could be beneficial for accountants looking to understand how this technology works and how it can be used in finance and accounting.
- Cybersecurity: As businesses rely on technology, cybersecurity is becoming increasingly important. Courses in cybersecurity, such as those that cover topics like network security, data encryption, and threat intelligence, could be beneficial for accountants looking to protect their organization's data and systems.
- Digital transformation: Digital transformation refers to integrating digital technologies into all areas of a business and is likely to be a key driver of change in the 4IR. Courses in digital transformation, such as those that cover topics like agile development and design thinking, could benefit accountants looking to understand and participate in this process.
The Fourth Industrial Revolution (4IR) is expected to significantly impact finance and accounting professionals, bringing challenges and opportunities. Here is a recap of the key points and implications for finance and accounting professionals in the 4IR:
- Automation and using artificial intelligence may lead to substituting human labour with machines.
- The 4IR is likely to lead to a shift in the types of skills in demand, with an increased focus on higher-level skills.
- The availability of large amounts of data and artificial intelligence can help finance and accounting professionals make more informed decisions, leading to improved outcomes.
- The 4IR is expected to create new job opportunities in areas such as data analysis, programming, and machine learning, as well as in sectors that provide goods and services to support the deployment and maintenance of advanced technologies.
To adapt to these changes, finance and accounting professionals should be proactive in developing their skills and knowledge, embrace new technologies, stay up-to-date with industry trends, and collaborate and network with colleagues and industry leaders.
If you are keen to understand the impact of 4IR and take up a certification course, feel free to browse our site on 4IR essentials or speak with us to customize a course for you.