AI and blockchain will affect billions of white collar workers
This is what was said about AI and blockchain at the World Congress of Accountants 2018
I recently attended the World Congress of Accountants 2018 in Sydney representing Transhumanism Australia. It is a prestigious accounting conference held in different cities every four years. A bit like the Olympics.
In a special keynote session, His Royal Highness Prince Charles delivered a video message, and Ex-UN Secretary-General Ban Ki-moon stressed the overarching impacts of climate change and that climate change denial is “politically dangerous, economically irresponsible, and scientifically totally wrong”.
What struck me about this conference was that the topics covered were like any other tech conference. Emerging technologies were widely covered, with much of the focus on AI and blockchain.
As a developer who has worked in both accounting and tax, I’ve been in a unique position of seeing both the rapid changes and resistance occurring in these professions, which are hot beds for disruption.
So have accountants (and basically any one in a white collar job) become technologists? If they aren’t already, are they expected to become one?
Here are the key lessons on AI and blockchain from the conference, which can easily be applied to any white collar profession.
AI will augment human capabilities but could eventually replace all human accountants
In the AI sessions, the key messages from presenters and panelists is that AI will augment human capabilities and that transactional and repetitive tasks are becoming increasingly automated.
For example, today’s AI could augment the human accountant in these areas:
- Automation of journal postings
- Prediction in budgeting
- Assist decision making through analytics
- Conversational interfaces
Most speakers noted that accountants have an increasingly important role to use their soft skills, which are harder to replicate in AI, to communicate with clients and the business.
Natalie Nguyen from Hyper Anna, a startup that does Siri for organisational data, believes that budgeting, governance, strategy and policy remain the domain of humans. This could be because these areas have high human touch, are too technical or have too many variables to account for.
The possibility that humans will not be needed for strategic input and insights in the long term wasn’t explored deeply at the conference. My predication is that this could become a bigger topic at the next conference in four years time as AI capabilities mature.
AI could eventually get to the stage where it can perform reasoning and foresight tasks faster and more accurately than a human. Much of strategy and policy is pattern recognition and data analysis, something machines are already very good at, and getting better at every day.
Much of today’s AI capability is too narrow to handle complex tasks above what the AI is trained to do. Next generation AI will be able to reason beyond what humans have trained the AI on and will require significantly less data than today’s AI services. Eventually, AI will become more human-like, such as the services being developed by SingularityNET, a decentralised platform for AI services.
Blockchain can remove the compliance, recording and verification work of accountants
Darren Younger from Lakeba, a software development company, spoke about blockchain’s use cases. In the Q&A, there were many questions around what technologies to use to build a blockchain, and how it would affect the accounting profession.
Darren introduced three key blockchain concepts:
- Distributed ledgers
- Smart contracts
A distributed ledger is a type of database that is replicated, shared and synchronised among computing devices. Information is processed and verified among all the devices. Blockchain is just one type of distributed ledger.
Smart contracts are computer applications which specify what conditions must occur or the rules to be followed before a transaction can occur and be recorded on the blockchain.
Tokenisation is the conversion of a right to a real life asset into tokens, also known as a cryptocurrency, that sits on the blockchain.
The following was not in Darren’s presentation but my own take on how blockchain can change an accountant’s role.
Distributed ledgers may eliminate month end close for accountants. Accountants must close out accounts for the prior month, and adjust incorrectly recorded past transactions. When there is a lag in the recording of transactions this can delay the account closing process. Distributed ledgers record transactions as they happen and can be verified in real time, eliminating both closing out of accounts and adjusting of past transactions.
Smart contracts could change the way accounts payable works. A journal entry can automatically be recorded when goods have arrived and payment has been made. An accountant usually enters these journal entries manually.
Tokenisation will allow accountants to easily track any asset such as stocks, bonds, titles, deeds, and inventory. A florist may choose to issue tokens to represent every flower it stocks. A customer may buy some flower tokens and choose to exchange it for an actual rose. The buying and exchanging of tokens is tracked on a blockchain and therefore the recording of transactions is done automatically.
Blockchain could help remove the repetitive and administrative tasks of accountants. It will especially remove the need for auditors as blockchains maintain data integrity and performs audits in real time. Consolidation, verification, compliance, recording are just some of the work that could be automatically done through blockchain technology.
The human factor: we already have infinite resources at our disposal through human capability
Reskilling was top of mind at World Congress of Accountants 2018. Matt Tindale, Manager Director of LinkedIn in Australia and New Zealand, spoke about the key skills that people are looking for in accountants in the last two years.
Interestingly, digital marketing and customer relationship management (CRM) appeared on the list of skills desired in accountants. Although it is noted that core accounting skills such as financial analysis, reporting, auditing and MS Excel are still highly desired.
Matt also pointed out three trends that have become apparent on LinkedIn: AI and automation, skills gaps and an increasing number of people doing independent work such as freelancing.
So while accountants might have to reskill, TED speaker and author Sir Ken Robinson reminded us not to forget our capacity to grow, learn, and create.
Sir Ken also emphasised that we should not underestimate the capability of people in existing teams to change and come up with new ways to do things, as long as the unique talents of employees are nurtured and they are provided with the opportunity to learn.
Accountants and other white collar workers still have an important role to play today, and need to start working with technologists or become one themselves to keep up with changes in their profession. At Transhumanism Australia we are continually exploring these changes.