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Software consolidation, automation with a human touch and fortified scam prevention are on this year’s agenda.
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Why finance will welcome fewer systems, but more AI, fraud defence
19 January 2024
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10 minute read
Last year marked a breakthrough for emerging technologies and many finance leaders began thinking about how they can integrate new tools into their existing technology stacks to improve efficiency.
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AI was just one example of new technology many have added to their arsenal, with 65 per cent of finance leaders saying they are using it to automate their financial reporting process. At the same time though, 29 per cent are still being selective about how they use the technology.
This will be the year we’ll see increased technology consolidation and automation, and heightened vigilance against ever-evolving threats.
Consolidation for efficiency
In recent years, finance teams have been inundated with an explosion of software-as-a-service providers that have promised improved efficiency across finance functions. Unfortunately, this exponential increase in service providers has had the opposite effect, increasing complexity and ultimately slowing down decision making for businesses
While most companies require numerous systems to run their business, according to a recent Stripe report, finance leaders are struggling with the sheer number of systems they need to manage on a daily basis. Almost two-thirds say they are struggling with inefficiencies while using more than 10 different back-end systems, with the problem magnified in enterprise businesses where nearly one-quarter use over 50 different systems.
This year will likely see finance leaders consolidating the number of software programs they use. A majority (65 per cent) have already come to the realisation they could save significant amounts of money by reducing the number of software systems they employ.
As businesses continue to grapple with economic uncertainty, they will favour providers that allow them to centralise data and reporting, minimise human error, and close their books faster.
Automation with a human touch
With the boom in generative AI last year, businesses are trying to improve efficiency by automating mundane, everyday tasks. Finance teams are no different and this year will see increased investment in digital technology to automate portions of finance operations.
According to Stripe’s report, finance leaders will still place a heavy focus on human intervention and we can expect to see greater time and emphasis placed on data analysis and strategic planning, building stronger internal partnerships between finance and business teams, and introducing new business models — all of which can have a significant impact on a business’s bottom line.
My advice for businesses looking to free up time spent on manual tasks would be to start by identifying the biggest source of manual effort for their finance teams, such as legacy systems and spreadsheets, and then select tools to automate a portion of these tasks.
For example, businesses dealing with taxes across multiple markets can reduce complexity with tools that automatically calculate and collect sales tax, value-added tax (VAT), and GST, freeing up a significant amount of time.
Fortifying against frauds and scams
The advent of new technologies means fraud and scams have also become more complex. According to a recent report by the National Anti-Scam Centre, between July and September 2023, there were 41 per cent more reports of scams compared to the same time in 2022.
As fraud becomes more sophisticated, so too must fraud detection and prevention measures. In 2024, we’ll see businesses taking on a more strategic and multi-faceted approach to fraud prevention, and increase the investment put towards educating finance teams and the broader business about how to best detect and prevent fraud.
Again, making use of the right technology can make all the difference and businesses can make use of fraud detection software to monitor transactions for signs of fraud, such as unusual spending patterns or transactions.
Looking ahead
This year promises to be pivotal for finance teams. While it’s hard to know how the year will shape up from an economic perspective, finance teams can start off on the right foot by revisiting their technology strategy and identifying areas where they can drive greater efficiency.
This will set teams up for success, and allow them to grow revenue and reduce costs, which will be essential to weathering uncertain economic times.
Karl Durrance is managing director, Australia and New Zealand, at Stripe.
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