AI offers smaller firms opportunity to ‘provide big 4 services’, says NAB
Advancements in artificial intelligence will enable smaller accounting firms to provide similar services to the big four at “high street prices”, according to a major bank.
The acceleration of AI technology will enable accounting firms to extract data insights more efficiently and provide a much wider array or advisory and value-added services than previously possible out of a smaller accounting firm, according to Adam Holster, professional services banking executive at NAB.
While the big four accounting firms are already investing extensively in their own approach to AI, Mr Holster said this doesn’t mean the bigger firms will start “hoovering up every client that would have otherwise gone to a suburban accounting firm”.
“That doesn’t mean that the smaller accounting firms will be left behind, they are a large component of the accounting market and the independent software providers will come in and meet that need [for AI technology] adjacent to the big four firms,” he said.
Mr Holster said technology is now allowing smaller firms to be able to “provide big four services at effectively high street prices” ,with a wide range of compliance tasks becoming automated and more efficient analysis supporting the provision of advisory services.
Compliance is one of the main areas where AI is automating a large number of tasks and processes. Mr Holster said there will still need to be some level of human input with these tasks in terms of reviewing and validating the work before submission.
“The obvious examples of where AI can be used is the preparation of the BAS, tax return and financial statements as well,” he said.
Generative AI can also help accountants to analyse compliance data more easily in order to be able to identify advisory opportunities within that data.
“Humans aren’t always able to see the patterns that machines see so these programs are able to surface insights to provide to clients,” he said.
The use of AI in other industries illustrates how it might be used in a similar sort of form for the provision of advisory services or other value added services that accountants and bookkeepers provide to their clients.
“With digital marketing, for example, we now have algorithms constantly running in the background to understand a consumer’s behaviour, their likes and dislikes and provide insights at a point when you need them,” said Mr Holster.
“We see that taking a similar form for the provision of advisory services.”
With AI technology continuing to open up opportunities for automation with accounting services, Mr Holster said the industry may see new software providers enter the accounting software market. This will have the effect of pushing the existing providers in the market to further develop their AI capabilities.
“If we think about some of the previous waves of digital transformation, there have been a mix of legacy and new providers at each one of those stages,” he said.
“For example, if you think about the move to the cloud, that was really brought forward by Xero more so than MYOB, yet they were both servicing a very similar cohort of customers. It took a competitor to raise the stakes and take the provision of those services to the next level within our market.”
“So we see an opportunity for new providers to supplement and pull some of those existing software providers along in the market.”
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