This article first appeared in Digital Edge, The Edge Malaysia Weekly on March 22, 2021 - March 28, 2021

More than 2,500 consumers and business leaders polled across Asia-Pacific (APAC), specifically in Australia, China, India, Japan and Singapore, find that the Covid-19 pandemic has increased financial anxiety, sadness and fear among people around the world. This is not unusual, considering that many have lost their jobs or are taking pay cuts.

This has contributed to a shift in financial management trust, to be more inclined towards robots rather than humans. According to a joint study released by Oracle and marketing research firm Savanta titled Money & Machines: 2021 Global Study, 76% of consumers in APAC say they now trust a robot more than a personal financial adviser to look after their finances.

Jasbir Singh, vice-president of application sales at Oracle, tells Digital Edge that this change in attitude has evolved gradually and been a long time coming, and has been hastened by the events of 2020, which accelerated digital transformation. 

“When it comes to stability, money has long been a key indicator of an individual’s position and ability to weather crises. Our deep, subconscious and often irrational relationship with money affects every aspect of how we think about and manage money in our personal and professional lives. This emotionally charged relationship with money has been exacerbated by the Covid-19 pandemic.”

This has left people with a greater anxiety over how to manage money wisely. In fact, Jasbir says, the Oracle survey found that 89% of consumers are experiencing financial fears relating to job loss and losing their savings. 

“Trust in humans is broken and robots are filling the gap. Eighty per cent of consumers believe that robots can help in managing finances better as technology can also help detect frauds, reduce time spent on managing finances and provide more accurate information for stock market transactions.

“We have also seen overwhelming enthusiasm in APAC to embrace artificial intelligence (AI), where 84% of business leaders in the region trust a robot more than themselves to manage finances as technology can help improve their work by conducting cost and benefit analysis, detecting fraud and creating invoices,” he adds.

The growing “trust” factor in technology is translating into three major outcomes, involving the role of chief financial officers (CFOs), the touchless finance factory and building the next-generation workplace. As business leaders increasingly seek the help of robots for their organisations’ financial tasks, this will lead to a structural change in the organisations’ business models. Jasbir says another notable change that will occur in the near future is a rise in customer expectations when it comes to financial services.

Across global markets, a growing number of consumers are cutting back on branch visits and handling cash. They are using digital banking services more often, which means their expectations for the services will grow, hence raising the bar on the quality of service and personalisation, Jasbir notes. 

“When we consider the changes in business models and consumer behaviour together, we see that the role of finance professionals and personal financial advisers will also never be the same again. 

“To adapt to the growing influence and role of technology, corporate finance professionals and personal finance advisers must embrace change and develop new skills. That being said, as dependency on technology grows, the role of financial professionals will become more strategic, involving tasks that require a high level of interpersonal skills, namely communicating with customers, negotiating or guiding customers to buy high-value assets.”

According to the Money & Machine study, the human element is still critical with local business leaders as companies prefer corporate finance professionals to focus on communicating with customers (37%), negotiating discounts (35%) and approving transactions (23%).

The study further reveals that consumers still trust financial advisers to provide guidance on major purchasing decisions such as buying a house or car, and stock market transactions. This indicates that when augmented by AI, these finance professionals will be able to focus on the key differentiators that really drive new value for clients and customers through their expertise. 

“The human aspect will be a fund house’s black box to differentiate itself, where fund managers and financial advisers will rely 80% on technology and 20% on human sentiments to make financial decisions,” Jasbir says.

“We will see more of an evolution in the role of financial advisers, where they will continue to be engaged to provide high-skilled consultation on investing practices, especially for the purchase of high-value assets.

“The role of financial advisers will also revolve around building new skill sets and capabilities for the next generation of employees, analysing machine-generated data to draw contemporary finance solutions and lean more on the human element to provide personalised customer service.”

The Covid-19 outbreak was an unexpected catalyst for the adoption of digital channels in every sector globally. According to Bank Negara Malaysia, between August 2019 and August 2020, there was a 47% increase in the volume of transactions made through the internet and mobile banking, and a 260% increase in active e-wallet users. In response to this burgeoning demand for the digitalisation of financial services and to spur Malaysia’s digital economy, Bank Negara is expected to release its licensing framework for digital banks. 

In addition, the government also recently announced MyDIGITAL and the Malaysia Digital Economy Blueprint, which aims to attract more investment in digitalisation. This will further spur the growth of unconventional financial services such as digital banks, insurtech and micro loans, says Jasbir.

With these changes taking place, financial institutions need to rethink the use of AI and other new technologies to manage financial processes and engage with consumers. “About 90% of APAC business leaders say organisations that do not rethink financial processes will face risks, including falling behind competitors, inaccurate reporting, reduced employee productivity and having more stressed workers. Reshaping skill sets will be a priority, with technology automating labour-intensive aspects of the job.”

As digital is becoming the norm in finance, AI and chatbots will play a fundamental role in helping organisations create new forms of customer engagement. Jasbir says while historically, financial service institutions (FSIs) have relied on price, speed and access as a way to attract customers, online platforms are making it easier for customers to compare prices. This means that FSIs will need to focus even more on the personalisation of services. 

AI will transform the CFO’s role too, says Jasbir, with the CFO and finance team becoming the strategic heart of the enterprise. 

He believes a CFO who seizes the opportunities brought about by AI and machine learning (ML) will not just transform the enterprise but also the scope, responsibilities and power of the job itself. On top of that, a PwC study states that the next generation of finance will reduce the size of the finance function by 50%, far leaner than what it is today.

Lastly, finance talent models are evolving quickly, placing a premium on data scientists, business analysts and storytellers. Jasbir says this represents a dramatic shift for many finance organisations and, to get ready, companies need to make sure their new hires represent the future they are striving for.

With AI and ML directly embedded in Oracle’s applications, Jasbir says the company is focused on delivering the next level of trustworthy, intelligent automation and a personalised and enhanced experience to employees. These include enabling touchless operations, continuous monitoring, predictive planning and digital assistance. 

“Like all of our applications, they are easy for everyone to use. You can do things like submit an expense report or approve a purchase requisition from your phone. And as we put more and more ML into them, they start helping companies make better decisions — which means better outcomes,” he says.

Some tasks business leaders are entrusting robots with include creating invoices and the approval process, adds Jasbir. Delivering on touchless operations means Oracle brings advanced automation, thanks to ML embedded in its Intelligent Document Recognition solution. ML is also directly embedded in finance applications such as Intelligent Account Combination Defaulting.

“Users can trust the results with higher accuracy, accelerate the approval process and save time on mundane tasks with intelligent process automation,” he says.

With Oracle Analytics for Enterprise Resource Planning and for Human Capital Management, Jasbir says the company brings the next level of insights, empowering business users across departments with connected and contextual data and insights.

“Organisations now have access to advanced analytics and put in place a culture of smart risk management to detect fraud and ensure audit and security compliance. Predictive Planning helps organisations identify and leverage trends and patterns in financial and operational data.”

“With access to predictions at data load time, organisations can see prediction and forecast variances, identify variance patterns and make plan revisions on the fly to improve the quality and timeliness of decisions.”

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.