Blockchain, Artificial Intelligence and Accounting: Changes are Coming
Accountancy is awaiting a great change in the upcoming years. Those will be mainly driven by the blockchain technologies and artificial intelligence.
As we all know, blockchain is a database that was originally created for financial transactions. Instead of using one centralised server, it uses a great many of them to store the data that is kept in data blocks with a specific structure. Each block links to the previous one, thus giving access both to its own data and the data from the previous block. It is not possible to change the data unnoticed. The system will immediately recognise that they differ from the data in other blocks and warn about it.
At the same time, the system always verifies the data in blocks and once altered, say, as a result of some transaction, it enters new information to the new block. This way, blockchain needs no accountant but itself. It traces all financial transactions in real time, tells of all the changes, and makes no mistakes or intentional manipulations to numbers. It is the ideal financial accounting as is.
Experts already talk through the necessity to implement blockchain in accounting practice. It is the trend that gains popularity slowly but steadily. For instance, USA holds discussions on the state regulators to use this technology for controlling financial transactions. For their part, experts from IFAC (International Federation of Accountants) has already noted that in the nearest future, those who can produce statements using the blockchain technology will be valued more than accountants using the traditional accounting software.
Artificial Intelligence (AI)
Artificial intelligence technologies are not to be treated as something that kicks-in someday in the distant future. They already exist and are actually put into practice. For example, AI helps diagnose serious diseases at an early stage. Some companies even create AI systems to predict the likelihood of some diseases developing.
The AI technology is also used in some banks to analyse the financial situation. Many major autogroups promise to release intelligent autonomous cars able to perform a number of tasks on their own, be it parking or paying a gas check.
There are great prospects for artificial intelligence in the accountancy. Its key advantage is that it can process vast volumes of data in no time. This means that AI is going to produce various statements on its own and fast. This technology will be useful in various studies allowing the data to be collected and analysed tenfold faster.
It is worth mentioning that the largest audit and financial companies have already integrated an AI system. These are different programmes and applications that use AI and cognitive technologies to perform certain calculations and data analysis. So far, such technologies have been used to meet narrow challenges, but the range of opportunities is expanding every year.