COVID-19 has created profound changes in the accounting industry. With teams no longer able to work together at the office—and no return date in sight—the need for automation has never been more pressing. Clients want quick, efficient solutions that enable them to do more with less. From lending decisions to payments risk management, only technology can provide the necessary support that businesses need.
Entering 2021, financial leaders will need to manage increased uncertainty caused by the pandemic. To quickly respond to changing environments, agility and flexibility will be necessary for business planning and modeling. The accounting function will need to consolidate to create synergies and efficiencies wherever possible. Additionally, the entire industry will need to remain future-focused to ensure survival during these challenging times.
Finance Trends to Watch
We’ve just experienced an unprecedented year, and in 2021 significant industry changes will begin to emerge.
First, we’ll see a rapid acceleration of the eCommerce, cloud, and digital industries. During COVID-19, retail juggernaut Walmart reported a 79% increase in eCommerce sales, with overall revenue improving by 5.2 percent. Entertainment industries like gaming also saw an increase in engagement. According to NewZoo, the gaming market is expected to have grown by 20% from 2019 to 2020.
Second, key fintech players, like banks and firms, will be investing in modernizing their processes and payment methods. In 2019, the Association for Financial Professionals noted that 70% of organizations were still experiencing check fraud and that manual processes were a core operational problem. At the forefront of this shift is the Bank of New Zealand, which has already informed its customer base that in 2021 they will stop supporting the use of paper checks altogether.
Third, automation will become even more of a priority as accounting teams lean into optimized solutions for a remote environment. According to McKinsey & Company, finance departments have reduced operational costs by 30 percent over the past decade, and the next ten years will focus on building even more efficiency.
The Pandemic Impact in Year Two
Technology will be a crucial player in all three 2021 finance trends, and we’ll see fintech automation become a strategic imperative in year two.
Travel, retail, hospitality, and fitness were some of the industries hit hardest by the pandemic. The spread of COVID-19 also hindered public entertainment venues, such as concert halls, sports arenas, conference centers, and casinos. But like eCommerce and gaming, many industries are thriving and creating new opportunities for payments and fintech providers alike.
In this new landscape, accounting teams realize that they can no longer operate in physical groups and within offices. As a result, all paper-based operations—such as invoice collection, processing, and check writing—creates unnecessary inefficiencies. Because of remote work, the need for digital governance, controls, and audit capability has never been higher. This fact forces firms to look to technology for a quicker, more productive solution to enable the business long-term. Now, we can no longer ignore financial best practices—automation is an operational necessity.
How We Move Forward
For accounting, uncertainty can lead to changes in the regulatory environment, compliance requirements, and currency fluctuations. It is essential to work with solutions that can help navigate increased market changes. When choosing the right technology, the system must have optimum functionality and a high level of sophistication. Accounting professionals and the high-velocity businesses they serve will be looking at robust platforms backed with cloud-based architectures that can adapt quickly. By adopting these types of solutions now, they’ll optimize efficiencies that will make it easier to scale.
In the next two to three years, finance leaders will be rapidly adopting flexible, responsive technology that can adjust to changing business environments. COVID-19 has taught us the importance of planning, and new business models and trends will continue to emerge from this transformative time.