Steve Palomino, the director of financial transformation at robotic process automation company Redwood Software, has both a CPA and an MBA and worked at two of the Big Four audit firms. Now he works on robotic automation - including for many accounting functions.
A lot of accounting processes are prime targets for automation. CFOs, financial services professionals and finance/accounting students need to know about it to future-proof their careers, according to Palomino.
“Areas we’re seeing automation hit first include accounting shops, and starting to see HR groups pick it up from a process perspective,” Palomino said. “It’s not industry specific; it’s really anyone who has to process information – we’re speaking to big banks in New York, hedge funds and telecom companies, really across all industries.”
Relying on robots is less risky than counting on human workers
Palomino claims that while cutting costs by cutting headcount is a factor, it’s certainly not the only factor driving adoption of automation.
“Humans bring the greatest amount of risk – systems fail but humans drive the most risk, from the rank-and-file employees and auditors all the way up to CEOs,” Palomino said. “Tax and treasury groups tend to be the absolute last groups to adopt new technology, or even consider it, but I’m actually getting calls from the treasury teams saying, ‘Maybe I can use robotics to develop automated processes and manage our workloads better.
“We’re not seeing as much of a drive toward cutting costs – it’s hard to find people who do bookkeeping, because a whole generation of younger accountants don’t want to do bookkeeping, which is 80% busy work, 20% analytical work,” he said. “The latter is the fun stuff, and we’re seeing a lot of organizations say, ‘We’re overwhelmed, we’re resource constrained,’ automation is not just about shedding resources.”
Robotic automation will kill some jobs but create others
As robotic automation gains traction in accounting, Palomino predicts that new jobs will be created – it’s just that they will be different jobs than people expected to be doing when they graduated from college. The way a C.P.A. does the job today is very different today than it was 10 years ago, and that will continue to evolve.
“Now that I have data available, I can have more resources focused on running the businesses,” Palomino said. “We will see a shift in jobs, but we won’t see significantly fewer jobs.
“If you don’t want to learn new skills, then it might impact you negatively, but I don’t see an adverse impact on our industry as a whole,” he said. “In the past, a bookkeeper did manual entries – firms hired a number of individuals to do those sorts of tasks, but robots will take over in the reporting environment, enabling people to move from a rote individual to a manager, someone who will be a partner in the business and help guide management strategically: ‘These are the takeaways from what the numbers are telling us.'"
Prioritize specialized skill development
From a professional-services and accounting perspective, IT auditors are considered specialists and so of course they earn more than plain-vanilla financial auditors, according to Palomino.
“In bigger companies, they look to hire auditors with more technical knowledge who understand the IT environment and how it works, what is a relational database, how is data passed, how do I ensure that the controls are applicable to a computer environment, not just accounting?” he said. “Increasingly, the job involves applying different data-management tactics and mathematical theorems – how do I direct the robots to grab that data?
“The robot says ‘I can get you 10 different things,’ so you have to understand what should you be grabbing and where you should be grabbing it from.”
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