Here's how Covid-19 could reshape the world of finance for years to come
You’d be hard pushed to find a sector that hasn’t been affected by the widescale disruptions of COVID-19, but for the financial world, the effects have been far greater than most.
From the large hit the global economy has taken due to a world in lockdown, to largescale supply chain disruptions and the subsequent closure of many businesses both temporarily and, in some cases, permanently, the finance sector has certainly been left shaken.
Now, as lockdown measures are slowly starting to lift in the UK, it’s clear the world as we knew it before will never be the same again. Of course, no one can be certain what the full fallout of the current pandemic will be, but here are a few thoughts on what could be in store for the world of finance over the coming years.
An increased reliance on technology
Experts have been discussing the topic of digital transformation in the financial services sector for many years. And, while many had been reluctant or slow to harness tech into their strategies, the recent UK lockdown has forced many to accelerate their digital transformation plans.
Helping remote workforces stay connected through video calls and cloud-based solutions, technology has played a key role in helping businesses adapt to the often quoted ‘new normal’ and that move towards a greater adoption of tech is only going to increase.
However, post-COVID, the use of technology to support finance teams will go far further than the communication benefits it offers. No longer will finance teams rely on archaic spreadsheets and manual paper filing, instead automation of everyday tasks that free up finance teams to focus on the bigger tasks, will fast become the norm.
While today, there are still many businesses reliant on manual processes to generate invoices and keep track of finances, a post-COVID world will bring about a need for increased efficiencies. As a result, it’ll be those teams that harness the benefits of automation early that are likely to recover faster.
Cloud accounting and true flexibility
By now you’ll have read many articles about how the new way of working will see a move towards more flexible working patterns. However, I’d argue that it will go further still, with employees increasingly expecting to choose when, where and how they work rather than sticking to strict schedules of perhaps a few days in the office each week.
After all, one thing the pandemic has proven, is just how well teams can work remotely.
Integral to this though is a move towards cloud-based solutions such as cloud accounting software. Providing teams with a real-time view of key financial data at all times, it means key decision makers have a clear picture of essential financial information at any time, in any place so they can make well informed decisions even when working remotely. In addition, it ensures that all parties are viewing the most up-to-date data at all times without having to rely on waiting for information to be updated manually.
Tools such as Access Workspace, for example, mean employees can communicate with each other and access key apps, documents and data digitally quickly and easily, helping teams stay connected even while not physically in the office.
You can read more on our thoughts on the importance of cloud accounting here.
Increased emphasis on scenario planning, shock-proofing and greater resilience
This year marked such largescale disruption, the likes of which have never been seen in peacetime before. And, although no one could have predicted the events that led up to a whole world in lockdown, one thing that has come out of this is the greater need for scenario planning and shock-proofing strategies.
Naturally, no business will be able to plan for every eventuality and no one can be sure whether the world will be faced with a fresh pandemic to battle in years to come. However, the need for clear plans of what to do when the unthinkable becomes a reality, has never become more pertinent.
As a result, we’ll see savvy financial-planning teams putting in place key strategies that cover a range of scenarios and uncertainties and that crucially identify trigger points that will prompt the business to make important adjustments to forecasts when needed to ensure they catch any potential cashflow issues before they become a reality.
No one has a crystal ball to see what the coming years or even months will bring but it’s clear the world of finance is at the dawn of a great change. Once the nation has come out of the other side of the current pandemic, it’ll be those financial-planning teams that have taken the time to identify and unpick the lessons learned from the crisis that will put their business in good stead for any future uncertainties that come its way.
Find out more about our finance and accounting solutions, as well as download our new free Building Momentum Guide to help fuel the recovery of your business.