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  • ArgonProconsulting

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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 automated5. What did we learn?

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    How did we end up here...?

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    History in brief

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

    70s

    80s

    90s

    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 PCs, 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/

    Theres 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 wifes 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 its why many people wont 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 worlds 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

    CFOs 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 60s

    Coder Accountant

    FinanceIT-dept.

    90s

    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 departments challenge Huge risks realising already every day

    Finance people needs more IT skills and IT people needs more finance skills

    Nee