A recent story in The New York Times story sent shivers throughout the alleyways of downtown Manhattan with its bold headline, “The Robots Are Coming for Wall Street.” Conjuring images of Arnold Schwarzenegger, armed with scientific calculator and a mandate to snuff out armies of analysts, the story painted a picture of a not-so-distant future in which half of Wall Street loses their jobs to automation software.
Further evidence suggests that the phenomenon is unfolding beyond Wall Street, affecting the broad professional services sector. The Boston Consulting Group predicts that by 2025, up to one quarter of jobs will be replaced by either smart software or robots. A separate study from Oxford University suggests that 35% of existing jobs in the United Kingdom are at risk of automation in the next 20 years. Among the top 10% of jobs most likely to be automated: insurance underwriters, tax preparers, loan officers, credit analysts, and accounting professionals.
Does that mean we’ll all be getting our tax advice — or, for that matter, financial and legal advice — from robots while we look for new jobs? In some ways, it’s already happening. Robo-advisers have become a fixture in the financial services space, and automated tax preparation apps have been the subject of a tax season advertising blitz.
While some of this transformation has already begun, the future of robo-enabled professional services is not quite as dystopian as the rebellion scene from Terminator or as stark as the research consultants have projected. Instead, we expect to see the industry evolve significantly as it increasingly marries powerful technology with the human element to create a hybrid — a cyborg if you will. This new breed of professional will be powered by big data and enhanced productivity tools.
Consider, for example, the impact of new artificial intelligence innovation on the current job market. Last year, approximately 4.4 million IT jobs were created to support the types of big data and data science initiatives that power artificial intelligence development, generating 1.9 million jobs in the U.S. alone. It is projected that every big data related role in the United States will generate employment for 3 additional people outside of the IT function. That means over the next four years, 6 million jobs in the United States will be generated by these kinds of initiatives.
Clearly, this type of evolution will have a major impact on the day-to-day lives of professional services workers, upending many traditional ways of doing business, while making way for new ones to flourish. But, ultimately, the process will drive further growth across a wide variety of industries. Based on our work leveraging technology to help accounting professionals gain better insights, we see automation playing the biggest role in helping professional services in the areas of connectivity and information filtering and analysis, ultimately allowing accounting professionals to become more proactive rather than reactive in managing client relationships.
Some of the basic building blocks are already in place today. For example, in accounting, advanced document processing and secure document transfer portals now make it possible for accounting firm clients to directly upload all of their information through a secure file transfer. At the base level, this could sound scary. With many of the customer touch-points being automated, how can individuals and firms differentiate themselves and add unique value?
The answer is by inventing new, better touch points. The fact is, for every new technological advance that makes it easier for machines to handle mundane administrative tasks, a thousand new complex issues are cropping up for customers that they don’t quite know how to deal with.
Consider data from eBay which finds that more than 90% of U.S. businesses selling their wares using ebay.com are trading internationally. On average these businesses sell to 30 different countries. It didn’t used to be this way. Mom and pop businesses rarely sold outside of their own zip code just 15 years ago. Now, they need to contend with a tangled web of international trade and tax laws, government regulations, and compliance needs. These are precisely the kinds of areas that great human accounting professionals are ideally suited to address.
What that means is accounting professionals will be spending less time combing through spreadsheets and more time cultivating the kinds of valuable insights that will help their customers anticipate hurdles and alter course before those hurdles become real problems. They will also have to nurture a decidedly different skill set that will prioritize trust, creativity, communication, and interpretive insight over mathematical acumen, mastery of tax law, or old-fashioned bookkeeping proficiency.
Workers and the workplace will need to evolve to address the growing demand for training and constant retraining on new technology solutions and we will need to become extremely proficient in the soft skills, nurturing relationships with clients, co-workers, and partners to expand our influence.
Most of all, though, the major evolution for professional services firms and workers will be a laser focus on summoning the ghost in the machine — that insightful story that’s hidden among the data — and translating that insight into actionable information for clients. These kinds of insights are the keys to building trust, which is an attribute that’s sorely lacking in a purely robotic relationship.
Brian Peccarelli is president, Thomson Reuters Tax & Accounting.