As technology integrates even deeper into consumers’ lives, the banking and finance industries are seeing profound residual effects. Mobile banking and payments are gaining traction and fewer people are visiting banks’ branches, while new software and automation programs are streamlining work for businesses and individuals.
Many of these developments have happened gradually, but with continual improvements to technology and consumers’ increasing reliance on it, changes are likely to happen even more rapidly.
Five Forbes Finance Council members – executives at accounting, financial planning, wealth and asset management, and investment firms – outline changes they seeing impact their industry in the next year.
Banking Technology Will Take Off
“Banking is changing,” says Jessica Mah, CEO, co-founder and product architect of inDinero, a financial services company that helps business owners manage their finances. And Mah, who started developing inDinero when she was 19 years old, anticipates that these changes will come quickly.
“It’s almost like the move from flip phones to smartphones; one day you didn’t see that older technology except with your grandma, and now even she has a smartphone!” she says. These banking technology changes will be broad: “The way banks behave, the way they are becoming virtual in every way, the way they are specializing and coming up with niche products that we’ve never had before (the Bitcoins of the world).”
Artificial Intelligence Will Continue To Advance
“People love instant gratification,” says Louie Balasny, managing director at Botkeeper. “They want results now, not a week from now, and certainly not a month from now.”
This is an idea that fits with Botkeeper’s business platform: The Boston-based company automates bookkeeping and offers 24/7 support to its clients.
“As AI continues to advance, the ability to provide more and more accounting in real-time with reporting and charts at your fingertips is going to change the bookkeeping industry and the traditional monthly accounting process,” Balasny says. “We are already doing a lot of this and most clients say they don’t know how they functioned without it prior.”
Shops Will Close
Changes in the finance industry are not only going to increase the reach of technology, but will also impact brick and mortar businesses, DeepSky Founder and CEO W. Michael Hsu predicts.
“In 2010 and 2011, the industry pushed the idea of having every certified public accountant (CPA), enrolled agent (EA) or bookkeeper start their own outsourced accounting practice,” says Hsu. “The idea was easy to grasp and it made sense on many fronts, but the execution was tough.”
While this idea seemed pragmatic to many just a few years ago, it is not the way of the future according to Hsu, who runs an accounting firm that targets entrepreneurs. “The next two years we’ll see a ton of consolidation and shops closing,” he says.
The Number Of App Developers Will Increase
As the founder and CEO of the consulting firm Fourlane, Marjorie Adams sees an increase in the number of app developers in the accounting industry.
“Everyone wants their own application or tiny change to an existing system, and it is becoming more affordable to build proprietary systems,” she says. “Programming platforms and their developers are narrowing that field to help build consistency in the small business marketplace for homegrown systems.”
Education Needs Will Grow As A Result Of Automation
Changes in technology are going to be beneficial to consumers – as long as they’re prepared for them, explains David Ehrenberg. The CEO of Early Growth Financial Services, a company that provides financial services and assistance to early growth companies and established enterprises, Ehrenberg says education is important in ensuring people adapt to automation.
“We are starting to see more automation in the lower-level accounting functions already, and that’s going to really change how everyone in the accounting services industry does business in the next few years,” he says. “The onus is on us as accounting professionals to educate users of these platforms about what those solutions can and cannot do for them.”