New digital technologies and the transformation of the finance function
The acceleration of the changes underway in the insurance sector places the organizations of the Finance and Risk functions in front of major challenges.
In a general context of pressure on profitability, the major challenges to be addressed can be summarized as follows:
High volatility of the insurance markets in an economic environment that is itself undergoing strong change A rapidly evolving regulatory environment that is constantly increasing its pressure in multiple directions Growing challenges for data, its security, and the ability of insurers to add value to it The acquisition and management of talent in a context of heightened competition for new skillsThis implies for the Finance and Risk functions to gain the agility to continue to fulfill their role of a business partner and essential contributor to the strategic management of the company while controlling their costs…. Do more with less in a way!
Fortunately, we can also consider working differently and new technologies can provide solutions that transform some of these multiple constraints into opportunities ... and thus support the Finance and Risk functions in their digital transformation, just like the rest of the business. company.
It is in this perspective that I will present to you in my new series of posts, a few non-exhaustive examples of innovations that must be taken into account in the transformation of Finance and Risk functions:
Automation of processes through Robotics and Artificial Intelligence (AI) Digital closing and Digital Performance Management Big Data for financial and risk management Introduction to Accenture's Financial Transformation Platform (AFTS)Automation of processes through Robotics and Artificial Intelligence (AI)
Process robotization and AI are part of the same process automation approach, but with different levels of ambition, technologies and applications.
Their scope makes it possible to cover transactional activities and can even go as far as accelerating certain decision-making processes:
Automation: a program performing simple activities such as consolidating and/or reformatting data from multiple sources, Robotization: A virtual user programmed to take charge of repetitive manual activities carried out in the chain of collection, processing, and accelerate the restitution of information in financial production or risk management. Artificial Intelligence (AI): Computer and algorithmic techniques such as Machine learning and Deep learning to replicate cognitive capacities of recognition, interpretation, judgment for decision and action purposes.There is certain progressivity in these different technologies and various associated benefits including:
- Quality improvement: elimination of human errors, traceability, and auditability of the activities operated by the tool. All the actions carried out are by nature document.
- Increase in productivity: reallocation of employees to more complex activities with higher added value (ie a robot operates 24 hours a day, 7 days a week, without interruption and performs its tasks at a speed unmatched by humans)
- Quick return on investment: Robotic and AI technologies are implemented in 'agile' mode, with ongoing production and minimal impact on the IT architectures in place.
Selection of processes to automate
Based on analysis grids and standard process maps, it is possible to quickly determine the potential for automating manual tasks carried out within the Finance and Risk management departments in their specific context.
A repetitive process involving data available in electronic format, with a high volume, based on stable rules, and not calling for actions based on human judgment is therefore probably a good candidate for robotization ...
Given their very "standardized" nature, many accounting production activities, recurring closing activities (technical, general accounting, consolidation) or reporting, etc. are thus candidates for robotization. Likewise, many processes can also be identified in other sectors: Investments, Actuarial, Risks ...
A robotization project on a perimeter allowing a return on investment in the year can take between 6 and 12 months. A larger-scale deployment across the entire scope of Finance and Risk functions cannot exceed 2 to 3 years, depending on the size and complexity of the organization considered. In all cases, the risk of "tunnel effect" is eliminated due to the process of putting robotic processes into production as they go.
Digital closing and Digital Performance Management
'Digital closing' makes it possible to take advantage of new technologies to facilitate the management of the many transactions involved in the financial closing, for example, Control of entry journals, reconciliation of accounts, analysis of variations, processing of inter-company transactions…, and of course the monitoring and coordination of the closure itself.
Under the term 'digital closing', we find the automation of reconciliation processes, the real-time view of the progress of the various closing works, the monitoring of tasks behind schedule, and the measurement of their impact. on those who are dependent on them.
For its own needs, Accenture has itself set up a 'digital closing' solution. This one has been deployed in more than 360 legal entities in 60 countries, representing a total of more than 55,000 accounts and involving more than 700 employees.
Quarterly documents are now produced with a time saving of 75%. There is a single repository for all account reconciliations making the review, approval, and certification process transparent and faster.
The use of "Cloud" technology brings more flexibility to users and real-time access from different types of mobile applications is also very useful for the fluidity of internal control and audit operations. In the end, the Finance Department teams were able to absorb a 30% growth in activity flows without increasing the workload of the workforce,
In the end, the 'digital closing' approach can allow:
Greater fluidity in the activities of collecting and preparing the data necessary for closure and its management, reallocate time to analysis activities, A better user experience (for preparers and managers) Improving the efficiency of the permanent control system, with the prospect of ultimately reducing audit costs, Strengthening process documentation and clarifying responsibilities. Technology indeed imposes the segregation of tasks (between preparation activities and validation activities for example), The implementation of solutions that are not intrusive in existing application architectures, can be quickly deployed in agile mode to adapt to changing needs.In the same spirit, we observe the application of similar approaches to management control activities while also relying on digital technologies for a multidimensional vision of indicators, with an easy and quick navigation capacity to carry out analyzes and graphic restitutions.
Beyond the classic budgetary vision built on historical data and the monitoring of a limited number of commercial and management indicators, management control can now integrate a greater diversity of data sources, can rely on different projection scenarios, includes predictive analysis, and is primarily decision-making. We start to talk about 'digital performance management.