Fund Accounting – The Future

How clever we thought we were in the Fund Accounting world back in the day – combining integrated Fund Accounting & Valuations systems with macro driven spreadsheets to reduce exposure to pricing errors, whilst deskilling and streamlining processes.  However, there was always a lurking reconciliation issue or dodgy security code somewhere in the mix which meant that the headaches never completely went away.

The industry (and regulators) then demanded strengthened risk regimes, with the result that we now see much greater focus on oversight via layered controls and alert systems.  The level of human interaction is still substantial however, driving attention towards AI (Artificial Intelligence) as a more efficient solution.

The Big 4 accountancy firms are already forging ahead with the adoption of AI and we hear that KPMG is investing $2 billion in a partnership with Microsoft to develop AI tools for themselves and their clients.  If this is the direction of travel, what is the future of Fund Accounting and what are the prospects for Fund Accountants?

The plus side for Fund Accountants is that AI will take away much of the data processing and interrogation that they are still saddled with.  We are told that AI can constantly analyse and compare data sets, identifying and correcting anomalies.  Manual reconciliation will be a thing of the past and the Fund Accountant will spend less time on validating data and/or correcting errors.  Reporting will be seamless – no more workarounds and less intervention.

So the concern for the traditional Fund Accountant must be – am I still needed?  Well, it would be naïve to think that large organisations will invest in technology without the quid pro quo of financial efficiencies.  One would expect some rationalisation or natural wastage as the landscape evolves.  However the Fund Accountant will still very much be needed and his/her profile is likely to be enhanced.  Unchained from the burden of data processing and report production, the role will be more strategic. 

Armed with high quality reliable analysis, the Fund Accountant will in future add greater value to an investment operation as a decision maker.  The lines between Fund Accountants and Performance Analysts will become increasingly blurred with the former likely to be closer to the fund management action than ever before.  Regulatory requirements will be continually demanding; the role of the Fund Accountant will be even more risk focused and less distinguishable from the Compliance function.

Change is coming and those who ride the wave of technology will succeed.