This guest post from our partner, BlackLine, offers key predictions for finance and accounting in 2024.
As we look into the future, it’s hard to ignore that the finance and accounting landscape is evolving at an unprecedented pace due to technological advancements. Let’s explore three pivotal predictions shaping the finance and accounting industry in 2024, offering insights into the changing dynamics and how F&A professionals can navigate this digital age.
1. The Rise of AI in Finance & Accounting
Artificial Intelligence (AI) is making significant strides into the finance and accounting sector, transforming how professionals approach their work.
One notable aspect is the expanded use of ChatGPT – a generative AI model – which is anticipated to play a more impactful role. Its scalability and agility can potentially enhance productivity by automating routine tasks, such as research, process execution, audits, and reporting.
However, the implementation of such cutting-edge technology requires a cautious approach, with professionals urged to weigh the benefits against the associated risks. Even the greatest of technologies have risks, and ChatGPT is no exception. Inaccuracies, fabricated information, and security risks all need to be considered.
In a survey carried out by Censuswide and BlackLine, 34% of finance and accounting executives acknowledged that the primary hurdles to their organization’s adoption of such technologies would revolve around confidence and trust in the information they produce.
Beyond ChatGPT, machine learning is emerging as another critical facet of AI. Companies are increasingly integrating machine learning into their processes to streamline operations and solve complex problems. An illustrative example is how BlackLine’s intercompany solutions incorporate predictive guidance machine learning capabilities to learn past behaviors and prevent intercompany transaction failures before they occur, minimizing time and resources spent across the entire transaction lifecycle.
2. Global Minimum Tax Regulations & Organizational Data Needs
In the realm of multinational organizations, the spotlight is on Global Minimum Tax (GMT) regulations. These regulations aim to standardize global taxes, eliminating loopholes and ensuring a level playing field across countries. The consequence is a heightened demand for organizational data as compliance requirements intensify. To navigate this shift, companies must proactively address the increased workload and leverage appropriate technology to meet regulatory expectations.
Countries worldwide, including major players like India, China, and Russia, are active participants in the GMT framework. While certain details are still being refined, staying abreast of individual country progress remains crucial. Resources such as the OECD’s website can serve as valuable references to track developments in this global tax landscape.
3. The Digital Revolution: Central Bank Digital Currency (CBDC)
Central Bank Digital Currency (CBDC) is emerging as a transformative force in the financial world. With over 130 countries exploring or implementing CBDCs, the financial landscape is undergoing a paradigm shift. This digital currency, issued by central banks, has implications for transactions – both wholesale and retail.
While wholesale CBDC is focused on financial institutions, retail is available to the general public. With the initial focus on wholesale, banks and other financial institutions must be prepared as their industries are impacted. As CBDCs move beyond wholesale transactions, their impact on everyday retail transactions becomes a crucial aspect to watch.
Understanding the implications of CBDCs is imperative, given the potential benefits, such as faster payments and increased transparency, juxtaposed with challenges like cybersecurity threats and privacy concerns. Staying informed about CBDC developments in specific countries is advised as the technology progresses.
F&A Should Embrace Innovative Technologies
As we navigate the digital age in finance and accounting, staying informed and embracing innovative technologies is paramount. Whether leveraging AI like ChatGPT, incorporating machine learning for efficiency, or adapting to global tax changes and digital currencies, professionals need to be proactive and embrace technology solutions to help their businesses thrive. Solutions like those offered by BlackLine provide tangible examples of how technology can streamline processes, reduce risks, and enhance productivity in this ever-evolving digital landscape.
This blog post was originally published on the BlackLine blog.
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