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Finance today and tomorrow… Some thoughts about the changing and developing role of finance and IT

15.1.2016Timo Nurminiemi

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AGENDAFinance today and tomorrow

1. How did we end up here…?2. Are robots stealing our jobs?3. The world is not quite ready4. When everything has been automated…5. What did we learn…?

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How did we end up here...?

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History in brief…

60’s Invoicing using typewriters, document transfered by ordinary post, book-keeping machine, own (physical) cash box, …

70’s

80’s

90’s

2000-

DOS-OS, first ready-made software for finance and accounting, need for specific account numbers in accounting, first general chart of accounts in Finland (1978), … First PC’s, floppy discs, printers, spreadsheets, MS Excel (1985),

Lotus Notes 1.0 (1989), Windows 1.0, … Windows becomes more common, OLAP-tools, Internet, ERP

systems becomes more common, electronic data transfer, firstfinancial shared service center set up in Finland, … Paperless office, digitalization, forecasting, analysing, data

warehouses, grafic reporting, dashboards in reporting, business intelligence, …

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Are robots stealing our jobs?

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http://www.wsj.com/articles/robots-dont-mean-the-end-of-human-labor-1440367275

In certain businesses robots and

automation has replaced human

labor almost totally

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The robot density in the general industry

(all industries excluding

automotive 2014)Rep. of South Korea

365Japan 211

Germany 161Sweden 142Finland 122

http://innorobo.com/en/about-innorobo/the-industrial-robotics-market-in-europe/

There’s still room for improvement in Finland…

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http://qz.com/196200/toyota-is-becoming-more-efficient-by-replacing-robots-with-humans/

Sometimes you need a step backward…

”But Toyota is deliberately

taking a stepbackward…”

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http://greenjobinterview.com/2015/02/recruiting-robot-human-interaction-ancient-news/

Robots are already involved in all kinds of administration and support work and activities

- Finance, IT, HR,…

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http://www.active8robots.com/blog/collaborative-robots-bringing-work-back-home/

From Offshoring to Reshoring…

”Reshoring … whether for

financial, quality or

ethicalpurposes.”

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http://www.wsj.com/articles/the-new-bookkeeper-is-a-robot-1430776272

ExpensesSpeed

Efficiency= Competitiveness!

The future of finance?

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Buy-/sellside robots in financial markets have already caused quite a

many market disturbances…

Elwin de Groot (Rabobank): “Blame the robots” for Greek market wobbles (June 2015)

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http://finance.yahoo.com/news/i-asked-a-few-robots-how-i-should-invest--here-s-what-they-said--131949010.html

“Yet after going through these exercises, it occurred to me that none

of the robots know anything close to my whole situation. They never asked

about my present employer Vanguard 401(k) account, an IRA rollover from

another corporate retirement plan, my wife’s assortment of former-employer

stock, whether we own a home or have 529 college-savings accounts or have lots of debt, or whether I have a habit

of overpaying for antique maps now and then.

Those are the things that only an investment advisor with a pulse, a

business card and a license would ask. And it’s why many people won’t be

ready to let the robots run their finances, no matter how smart and

friendly they are.

Lost game?

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“By passing logic tests like this, robots

are able to build up human-like reasoning

skills that will prove useful in future

technology such as driverless cars.”

However, the development continues…

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”Company boards are also soon likely to

feature a robot-like intelligent system that will forecast, calculate and take management

decisions with incomparable

efficiency and speed.”

http://www.opuscapita.com/news-and-events/robots-soon-in-financial-management-and-company-boards

“…wherever the world’s best robots

are, you will also find the best jobs”

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http://diginomica.com/2015/09/15/finance-and-accounting-next-target-for-the-robot-revolution/#.VpKBo1U8L4Y

This developmentpath will require

even more solid and uniform relationshipbetween finance and

IT functions.

Robots already implemented in finance and accounting

RPA = Robotic Process Automation

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http://www.accaglobal.com/gb/en/member/accounting-business/insights/robot-takeover.html

“RPA can open an email, examine the attached spreadsheet, and check that the information complies with set rules”

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The world is not quite ready…

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Cyber attacks are here!

Sources: FICS/Cyberlab, 2014, Jukka Viitasaari, Teollisen internetin tilannekuva 2014

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Fake president frauds on the rise…

http://belgium.marsh.com/Portals/95/Documents/Alert%20FPF%202pager.pdf

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http://www.aig.com/chartis/internet/uk/eni/aig-fraud-alert-a4-3page-v5_tcm2538-516102.pdf

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http://www.cgma.org/Magazine/News/Pages/cyber-security-spending

Risks areincreasing…

CFO’s are taking itseriously…

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”IDC: The amount of digital information is going to explode by 2020” In digital world only 25 percent of data is

original and the rest (75 percent) is copy.

Who will pick and process thismassive amount of (finance) data and evaluate what is relevant? And what are the tools for that?

Based on estimates approximately 0,5 percent of new data is coming from Finland

20202010 2012 2014 2030

1 333 ZB

44 ZB

1,2 ZB4,4 ZB

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Spreadsheet risk…

When wasthe last time

you eventhought

about this…?

http://www.eusprig.org/horror-stories.htm

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http://ww2.cfo.com/spreadsheets/2014/10/spreadsheet-error-costs-tibco-shareholders-100m/

How to produce a tool with the

flexibility of Excel and security of a (coded) software

tool?

Spreadsheet risk - A uniform cause of

worry… this is ourcommon fear…

It may become quite costly…

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When everything has been automated…

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”Automation will increase speed, efficiency and competitiveness.”

”Remember - All this should support the management and steering of Your organisation”

”Reliable and promptly delivered financial information will support high-quality decicion making ...”

Then what…

”Traditional Finance and accounting will fade away…”

”… it will be raplaced by future oriented financial management.”

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When everything has been automated…

What is left is value adding human interaction…

Man

ual/p

aper

offic

e

Pape

rless

offic

e

Elec

tron

ic

Dig

ital Automation and

robotics (RPA)

”Intelligent finance”

”Future accounting”, forecasting

Futureorientedfinancial

management

Modelling and analysis

Foresighting

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Already today there is a need for finance people who ”speaks” (understands) IT …and vice versa

The skills and talents needed will also change…

”Coder” ”Accountant”

IT-dept. Finance 60’s

”Coder” ”Accountant”

FinanceIT-dept.

90’s

”Multitalents” 2000 =>

”firewall”

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What did we learn…?

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Outlook for the future

When all routines has been automated… How to build processes and systems (software

tools) focused to forecasting and future? Future oriented financial management!

The amount and need for knowledge and information will grow exponentially How to pick up the relevant information from

massive amount of data? And fast enough? In some businesses an hour (or day) may be too

slow - in some businesses a month is ”fast enough” reporting period.

Cybersecurity - not only IT department’s challenge Huge risks realising already every day

Finance people needs more IT skills and IT people needs more finance skills Need for IT-Finance ”multitalents”

Which one is more relevant or

important -reporting history

by the ”lastdecimal”, orfocusing on

forecasting and the future?

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The world, technology and business models are changing…

Finance and IT people must also change and adapt… What is needed is cost efficiency, new ways of thinking and new kindof talents…

@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

ArgonProconsulting

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@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

@TimoNurminiemi

http://www.linkedin.com/in/timonurminiemi

Timo Nurminiemi


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