Buzzwords like automation, mechanisation and digitisation can sound like the end of the human workforce and the loss of personalisation, but in fact they offer a bright and efficient future for the assurance industry, writes Richard Warren-Tangney, Partner, Financial Services at BDO South Africa.
Digitisation, automation and transformation. Machine learning, robotics and artificial intelligence (AI). The lexicon of technology buzzwords has become, for many sectors, representative of complexity, unwanted change and negativity. These perceptions haven't been helped by reports that millions of global workers will lose their jobs to robotic automation by 2030.
But these facts don’t look at the whole picture.
Yes, certain jobs of tomorrow may be lost to ‘robots’, but the essential value that the human element plays in business success, particularly in the assurance industry, cannot be negated. Technology is invaluable, but only in its ability to digitise manual labour, to remove unnecessary pain points, and to make working lives simpler and faster. Automation cannot replace intuition, ethics and understanding. It can do away with drudge work, help engender deeper trust and client engagement, and revolutionise the industry's approaches to skills development and management; but it cannot take away the intrinsic value that human thinking and values provide to the client, business and sector.
Consider a company's employment records – every month, employees earn the same, increases and bonuses excepting, while their addresses, ID numbers, and bank accounts do not change very often, if at all. Automating the auditing of employee data, and payments made to them, is a relatively easy process instead of using the hard-won skills of a young professional to painstakingly undertake this simple repetitive process. An algorithm can review every change made, maintaining the accuracy of the data, and do the job with reduced margin for error in a fraction of the time.
Automation provides the organisation with efficiency gains that improve the quality and speed at which both structured, and unstructured, data sets are managed. As a result, the organisation can obtain assurance that every transaction has been tested, is accurate, valid, and comprehensively managed. But, perhaps most importantly, it creates the opportunity for the skilled professional to be shifted onto work that demands greater insight and expertise.
When transactions are complex, or take place as a single, once-off event (like the purchase of a business for example), automation is typically either incapable of collating the information to create the right insights, or unable to unpack the variables in ways that are accurate, relevant, efficient or add value. This is where the human element remains essential.
Digitisation in assurance is about removing the pain points as quickly and efficiently as possible so that the organisation can free up brilliant minds to apply themselves to more complex tasks requiring broad knowledge and experience, deep insights, and profound thought. It's this message that is lost in the hype and the rush to digitise.
People are essential to fully realising the value of data; they are not its barrier.
Perhaps the biggest question that automation asks of the assurance profession – how do you train new auditors when low-level tasks and pain points have been digitised? The answer is to revisit how we induct new members to our profession to review and refine the skills and behaviours that we value in these young professionals. We need to provide them with learning experiences that allow them to think critically, evolve and expand their world view, and fine-tune their analytical capabilities as they grow in their careers. Now is the time to train people so that they are capable of leveraging the potential of the technology at their disposal. There's nothing remarkable about checking invoices and transactions – this does not enable critical thinking – however collaborating with others, finding solutions to challenging problems, and discovering new ways of thinking are far more valuable to both the individual, and the organisation. As the world continues to digitise, these approaches will transform the assurance industry in terms of capability, ingenuity and growth.
For many, however, the risks of digitisation remain too great. They've been influenced by all the words that begin with “mis” – misunderstanding, misrepresentation, misdirection. Stakeholders, auditors (internal and external), executives still lack the understanding as to what it all means. Digitisation will not replace people, instead it will replace cumbersome ways of work that that limit potential.
Humans make the right decisions. Humans have ethics. Machines do not understand the nuances nor do they have the know-how to interpret body language or understand societal boundaries and the subtleties of what is right and what is wrong. Algorithms are only as good as those who create them – ethics have to be coded, bias has to be removed and behaviours have to be modified. Digitisation is nowhere near the point where systems can undertake, or even replace, the layered critical thinking of a professional.
South Africa sits at the forefront of this digital revolution and is leading the way in digital assurance, globally. Our financial sector has undertaken remarkable strides in the digitisation of services and the modernisation of capabilities. This inventive mindset and innovative approach to digital transformation is not some secret sauce served only in South Africa, it's recognising that legacy lies in building sustainable foundations that can adapt and evolve to meet changing market needs; that critical thinking and a broad world view that is able to harness the power of digital can change lives. This is the real value of digitisation – an advanced toolkit that's only as brilliant as the minds that wield it.