Banking in the Cloud – What’s there for Accountants?
Cloud maturity has become an earmark of the world’s top-performing banks. The COVID-19 pandemic has further highlighted the urgency of the cloud banking imperative. Functions such as human capital management, customer management, and financial accounting have been shifted gradually to the cloud.
About 40% of banks have deployed cloud computing in 2020, up from 32% in 2019. Furthermore, public cloud spending will rise to nearly $500 Bn in 2023, of which three industries – discrete manufacturing, professional services, and banking – will make up for a third.
So, what does this means for accountants? And how will accountants’ jobs change with banks shifting to cloud? Let’s get into the details.
Cost Accruals: Earlier, accountants had to perform manual reconciliations, run multiple reports, and account for the mismatches separately in every company ledger. Now, with cloud enterprise resource planning (ERP) platforms, accountants can run an open purchase order (PO) report and then run a single journal leveraging the system’s multicurrency, multi-ledger journal template.
Before shifting to the cloud, accountants had to devise independent journals for several different operating entities – a daunting task that demanded the time of various team members.
A multi-ledger, multicurrency template lets accountants do it at once irrespective of currency. Now, a handful of team members can manage the journals and process the numbers accurately and timely.
Cost Allocations: Accounting has to split up an array of expenses among domains or lines of business. Case in point, accountants have to assign workspace rental expenses among divisions at banks and financial institutions as per the space occupied and benefits expenses by all departments’ strength. It is hard labor in a global bank with tens of thousands of employees and hundreds of locations.
Previously, accountants had to leverage a formula for such allocations at the country (entity) level, which stretched to some thousands of allocation formulas. However, now that this process is on cloud and banks have shifted to a global chart of accounts, the allocations are standardized and decreased by a significant degree.
Accountants can now draw sub-ledger reports and account assessment from cloud regionally or globally – and easily carry out worldwide reconciliations for a category (including accounts payable) for all regions with cloud. That will let them view general problems and possible risks in a category across geographies.
Data Visualization: Apart from not spending time monitoring and verifying such insights, accountants can use the cloud-based system to visually explore data. All they have to do is upload their data and get diverse visual analytics in bar diagrams, flow charts, or whatever way they specify. It can manage myriads of rows of data and offer analytics in just a couple of seconds.
That ability to swiftly connect the dots – which behind the scenes is complemented by machine-learning (ML) capabilities combined with the banking system – will let accountants deliver a degree of insights that have never been feasible earlier. Now, they can look into data and deliver meaningful interpretations. They will be not just looking at numbers, but the meaning behind those numbers.
Experience the Cloud Today
All in all, cloud banking services and the automation of data entry such as credit/debit and customer data are taking a high time burden off accountants’ shoulders.
The question, then, arises what to do with all these additional hours. As a matter of fact, there will be no extra hours as customers have a never-ending demand for accounting proficiency that goes past the conventional data-juggling roles.
Today, accountants find themselves serving as advisors in different financial domains. Some are providing services such as business consultation and portfolio management. The way they see the rise of cloud banking services, they are up for the challenge. Other accountants should also follow suit.
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