Evolving financial technology has always been a curse and a blessing to businesses. Used correctly, it accelerates processes, automates minutiae, and makes work easier.
However, technology also has the dangerous potential to distract, distance, and disorient.
With the speed and scale at which most businesses move, it’s impossible to operate without taking advantage of the latest technology, especially when it comes to finances. Fintech (financial technology) is a hot commodity, and for good reason—it empowers companies to better manage their financial operations by using specialized software and algorithms.
This technology is essential for any modern business to gather, analyze, and use important financial information to survive and thrive. Without it, your business is banished back to leather-bound ledgers and the Pony Express.
In this article, we’ll reveal how technology can transform your financial systems, and why it’s inadequate (and precarious) without a human touch.
How Financial Technology Can Improve Your Accounting Systems
Businesses big and small rely on technology to expedite nitty-gritty work. However, fintech is increasingly critical for startups who lack the budget and headcount to rival larger competitors.
Here are 4 ways technology can elevate your business’s finances:
- Boost productivity: There are only so many hours in a day, and the more time you can free up for your team, the more you can get done. A 2017 McKinsey report found that most businesses could use tech to automate at least 30% of their activities. By offloading trivial tasks to software, you can help your employees spend their time on more high-priority items.
- Save money: Time is money, and so is data. Fintech empowers businesses to make data-backed decisions, so they don’t squander cash on low-ROI marketing tactics, employees with a higher turnover risk, or poor investment decisions. Technology puts this financial data in the hands of decision-makers—however, numbers still require interpretation (more on that soon).
- Find capital: Thanks to fintech, you don’t have to shop around at every bank in town to find a competitive loan. With business loan marketplaces like Lendio, you can find and secure capital in days instead of weeks. Plus, alternative lenders now offer startups and small businesses generous financing options, which banks typically make painfully difficult.
- Super-charge remote work: Now, more than ever, business teams need remote tools that work anytime, anywhere. Cloud technology makes it easy for employees to collaborate on finances, even if they’re cities, states, or oceans apart. Regardless of what happens with government closures or social distancing regulations, your team can rely on technology to work together.
Financial Technology Alone Isn’t Enough
While technology might seem like the end-all-be-all of business tools, it’s not all sunshine and rainbows. Despite its fantastic potential, technology alone isn’t enough.
As you’ve likely experienced with your phone’s dreadful autocorrect or Siri’s widely misinterpreted commands, you can’t solely rely on technology to get the job done. Your finances still need reliable checks and balances—a human touch.
That’s why accountants and advisors still exist (and will always exist). Yes, technology can collect, analyze, and output data, but it still takes an experienced, professional mind to interpret those numbers and make essential business decisions.
Technology can’t help your business make the right logical and ethical decisions. You need humans for that.
Yes, humans can make errors, too—and often do—but they possess the unique ability to make rational decisions. While artificial intelligence (AI) is seeking to “get us humans out of the way,” it’s not there yet, and may never be.
Get the Best of Both Worlds With a Tech-Savvy Professional
Technology and professional accountants aren’t at odds and ends with each other. From the birth of the abacus to the beginning of Excel and beyond to the fintech software we have today, financial experts have always used tools to advance their methods.
Now, technology helps accountants and finance departments focus on the big picture rather than on the trivial tasks of data entry and spreadsheet audits. And that’s a massive relief, especially considering the massive volumes of data businesses are collecting and processing.
Without context, all technology gives you are numbers and percentages. To harness the true potential of fintech, you need competent professionals who can make sense of the digits.
No longer do accountants speak stereotypical GAAP and depreciation mumbo-jumbo—thanks to technology, the accounting industry is finally able to speak the language of business.
New technology has tried to eliminate the need for CPAs and advisors, but they’ve ultimately failed. It turns out that you can’t wholly automate accounting—you still need a human touch to interpret the data and make smart business decisions.
Conclusion
Technology will always improve data, but data without context breeds confusion. And a professional accountant or advisor without the right tools lacks the financial information to draw insights from.
For your business to succeed, you need both technology and human professionals.
New technology trends will emerge, and others will disappear, but the need for humans in finance is ever-present. The businesses that combine the two will unlock powerful insights that lead to better decision making.