Jersey’s robust fibre broadband network (the second fastest in the world only to Macau) allows a relatively small island to draw on worldwide
resources, expanding the available pool of accountants to service our thriving financial services economy. This ability to scale resources has ensured – and will continue to ensure – Jersey’s success.
Accountants are used to automation, with accessible and cheap SaaS products already doing the heavy lifting when it comes to data entry, reconciliation and financial statement preparation. Boxes of receipts and manual bank reconciliations are no more. So the question begs – what else can computing power do to help us? Where is the safe limit.
Many of us took note earlier in 2023 when ChatGPT-4 passed the US CPA exams, one of the most notoriously difficult accountancy qualifications on the planet. If it can pass the exams, are we all on a path to artificial intelligence (AI) driven redundancy?
Fears of mass job losses are thankfully unfounded. There is more work available than there are accountants to service it. That is not a problem unique to Jersey but endemic globally.
Accountants are highly mobile and with technology, firms compete globally for resource rather than at a local level. Will AI take your job? Unlikely. Will it take some of the grunt work away? Definitely. Will it be able to provide an accurate and safe viewpoint on a technical accounting point? Probably, yes but not yet. Also – most critically – only if you have the skills to put it to use. Those who do not are at risk.
The Association of International Certified Professional Accountants (AICPA) believes that the firm of tomorrow will shift from today’s triangle hierarchical structure to a diamond structure. Such a structure hits on the same recurring theme – skillsets need to be more diverse. Future accountants need to have a firm grasp of AI and tech concepts and ideally should have some basic programming experience. Whilst it is tempting to let AI run free in performing work, documenting files and advising clients, the majority of firms are taking a very cautious approach. Concerns around data security, already mentioned, are well founded. Free AI services are only free to the extent that they are not paid for with money but you would be wrong to assume they are not paid for with your data – ChatGPT’s terms warn ‘we may use the data you provide us to improve our models’ and ‘we retain certain data from your interactions with us’.
Clearly such terms are not acceptable for client use. Larger firms know this and are investing heavily in their own AI models or commercial grade integrations with existing AI systems. PwC recently announced a $1 billion AI investment over the next three years. Smaller firms will need to keep up to speed in order to survive.
With more data, connectivity and processing comes increased cybersecurity risks. Ensuring the security of client data in an increasingly connected digital world is a pressing issue that
firms and their clients need to address. Firms who have a strong grasp of their own cyber risks have been able to leverage their expertise in risk assurance to turn their cyber risk knowledge into an opportunity.
Cyber assurance has become a core service line for many firms, a mandatory part of most (if not all) audits since the revisions to ISA315 in 2022 and will only continue to increase in importance. Suppliers to the Government of Jersey are already required to hold CyberEssentials certification, there is muttering of legislative requirements for all businesses holding data to be cyber security certified and it is only a matter of time before the financial services regulator – Jersey Financial Services Commission (JFSC) – starts to look more closely at the possibility of supervising and examining cyber risks for regulated entities.
The adoption of AI comes with other challenges. There is a skills gap in the industry, as many accountants lack the expertise to leverage these new tools effectively. Jersey has recognised the urgent need for training and upskilling programmes to equip professionals, not just accountants, with the necessary skills to navigate this digital landscape. Digital skills training initiatives led by Digital Jersey continue to ensure the local talent pool is up to date with future technologies. At the time of writing this article, there were no less than 13 courses available in the next three months, of which four are focussed on AI and automation.
Despite the challenges, Jersey’s accounting and auditing sector is well-equipped to navigate the AI accounting landscape and to maximise the opportunities it brings. The Island’s financial services regulator, the JFSC, actively promotes technological innovation while ensuring a robust regulatory framework. Revenue Jersey continues to take steps to allow tax agents to file digitally and access statements online, albeit not at the pace that tax agents would wish. It is likely that Jersey will legislate to adopt Open Banking, a service necessary for continued automation between client software systems and local banks (already mandatory in the UK but not in Jersey).
Investment in AI, technology and data security by all of Jersey’s key stakeholders (Government, regulators, industry and enforcement bodies) is encouraging and will continue to ensure Jersey’s position as a leading finance centre and a safe, efficient and high quality jurisdiction to do business with.
