AN OVERVIEW:

Nowadays, the finance and accounting sectors no longer follow the old traditional methods; rather, they have evolved into an industry with modern techniques, technologies, and strategies. In this ever-evolving industry of finance, ACCA professionals need to keep up with the trends and updated skills to maintain their competence in this industry. Likewise, these professionals are expected to have rigorous insights about Fintech trends to face new challenges and avail a bundle of new opportunities. Ahead are some growing trends in fintech and their impacts on finance professionals.

BLOCKCHAIN AND CRYPTOCURRENCIES:

Blockchain technologies help to record, maintain, and track assets and transactions across a business network. Examples of cryptocurrencies are Bitcoin, Ethereum, etc. Blockchain with cryptocurrencies transforms how the transaction is conducted. Through this technology, organizations can acquire transparency, accuracy, fraud reduction, etc. Cryptocurrencies nowadays are playing a big role in the financial market by influencing regulatory frameworks and financing strategies. Blockchain technologies make tasks like auditing, transaction verification, etc., easier for professionals and ensure accuracy. Therefore, ACCA professionals are expected to understand cryptocurrencies and blockchain technologies.

ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING:

In modern times, a good command of artificial intelligence is a need, as every task somehow or other can be automated with the help of modern technologies and AI. The use of these platforms can be highly time effective and productive for finance professionals, as well as Accountants can use these tools to do their daily tasks such as predictive analysis, risk management, fraud detection, etc.  AI makes these tasks easier, quicker, and produces accurate results. These platforms also help in effective and smart decision-making. The finance professionals should, however, have a good command of AI and understand its role in financial analysis, etc.

OPEN BANKING:

Through open banking systems, third-party developers can avail financial data from the banks to put forward solutions for innovative payment methods and services. Some of the reasons why open banking is playing such an important role in financial sectors nowadays globally is because it offers personalized banking experiences, new and innovative business models, etc. Financial professionals and accountants in this regard need to enhance their knowledge and expertise regarding open banking, their regulatory compliances, data privacy strategies, etc.

DIGITAL PAYMENT SYSTEMS:

These days, along with innovation in every aspect of life, people prefer digital payment systems over cash. With the increased audience opting for digital payment systems, many new payment platforms are introduced (mobile wallet, PayPal, etc.). This innovation requires secure payment solutions. In this scenario, the role of finance professionals is to stay updated with regulatory challenges, risk management, impact on tax compliance, and financial reporting.

ROBO ADVISORS AND WEALTH-TECH: 

Robo advisors and wealth-tech are the platforms that can generate automatic financial planning of an organization, work as an advisor, propose low-cost investment strategies, etc, based on their analysis and algorithms. The accountant should be well aware of these platforms and their strategies, regulatory landscape, traditional wealth management, etc.

PEER-TO-PEER LENDING OR CROWDFUNDING:

P2P lending platforms are used for borrowing and lending money without any financial institution being involved. This platform completely discontinues the traditional lending models. However, in such scenarios, credit risks are higher; hence, ACCA professionals should be well aware of the risks associated with these platforms, tax compliance, and accounting implications.

DATA PRIVACY AND CYBERSECURITY:

With a high rise in fintech trends and financial platforms, the risk of data breaches and misuse of sensitive data becomes intensive. To maintain data privacy and cybersecurity, the risks financial institutions face have a big impact, which leads to legal and financial liabilities. Finance professionals should understand the sensitivity and delicacy of financial data and its confidentiality; they should follow data protection regulations such as GDPR.

EMBEDDED FINANCE:

The lending, insurance, and payments into non-financial platforms are called embedded finance; it allows the users to avail financial services from non-financial platforms such as social media sites, etc. This brings more challenges for ACCA professionals, some of which are the impact on taxation and revenue recognition.

HOW ACCA PROFESSIONALS CAN FACE THESE CHALLENGES:

Continuous learning:

Keep yourself updated with new technological advancements in fintech, have a good understanding of the trends, gain relative skills, and stay competent in the accounting and finance sector. To add value in your work profile you may attend webinars, seminars or programs offering certificates in areas of fintech trends such as Artificial intelligence, blockchain, etc.

Advisory role:

As the complexity of fintech remains increasing, you may take over advisory roles. Advisory roles mainly deal with the regulatory matters regarding finance and accounting in an organization and ensure the financial reporting complies with the regulations.

Tech integration:

To adapt to fintech trends, ACCA professionals need to have familiarity with AI and automated software, blockchain solutions, etc. This can make the process easier and more productive and deliver the best outcomes.

Risk Management:

A good understanding of the risks attached to these innovations, such as data breaches and cybersecurity threats, can help ACCA professionals make informed decisions and propose critical solutions and strategies to overcome the threats.

CONCLUSION:

Without a doubt, fintech trends are shaping the accounting and finance industry rigorously. The trends and innovations of fintech are never-ending; hence, ACCA professionals need to adapt to the change. These professionals should be able to let go of the traditional methods and models of finance and adapt to fintech technologies, trends, or platforms. It is advised for the professionals to keep themselves updated with the current technologies and modern business models in order to stay competent in the financial industry. Good understanding about fintech and its uses can add value to your professional work profile.

FREQUENTLY ASKED QUESTIONS:

Q1: What are the key fintech trends shaping the finance industry?

Answer: The important trends in shaping the finance industry are:

• AI and machine learning,
• Blockchain and Cryptocurrencies,
• Digital banking and neobanks,
• P2P lending,
• RegTech, etc.

Q2: What is the current state of fintech, and why is it important for ACCA professionals?

Answer: Nowadays, fintech is becoming stronger day by day; it is completely replacing old traditional methods and models with modern technologies. It is highly praised as it makes tasks easier and offers accuracy and transparency. It is important for ACCA professionals to have good knowledge and required skills for decision-making, ensuring compliance, strategic guidance, etc.