The Impact of FinTech on ACCA and its Changing Environment
Peter Johnson- Jan 3, 2024
- 5 min read
The finance sector is seeing revolutionary changes due to the emergence of FinTech. As the job roles change and fresh openings come up, professional accounting associations like ACCA (Association of Chartered Certified Accountants) are modifying their prep programs to ready members for this changing atmosphere. Let’s take a look at how ACCA is arming accountants for the FinTech period and how certifications like FRM (Financial Risk Manager) can help ACCA in opening up a world of career chances.
FinTech is making a major impact on financial services, from payments to investments, lending and insurance. Global investment in FinTech has seen an incredible increase, rising from $50 billion in 2017 to more than $210 billion in 2021 (as reported by KPMG in their Pulse of FinTech H1 2021). Similarly, India has experienced a noteworthy expansion in investment into FinTech firms, with the commitment rising from $3.7 billion in 2020 to $10.4 billion in 2021 (IVCA-EY FinTech Report 2021).
- Digital Payments: According to the figures presented by NPCI, UPI transactions have seen a huge surge, growing from 1.6 trillion in 2019 to 4 trillion in 2021. Companies like Paytm and PhonePe are also expanding.
Digital lenders such as ZestMoney and MoneyTap utilize data analytics for credit evaluation. KPMG estimates that disbursal of credit by Indian FinTech lenders will go up from ~$11 billion in 2020 to ~$350 billion by 2025.
WealthTech startups like Groww, INDWealth and Smallcase are simplifying investing via robo-advisory and micro-investment platforms.
Policybazaar, Acko, and other online insurance marketplaces are leveraging AI and ML as they work to revolutionize policy purchase. Morgan Stanley believes India's online insurance market could reach $15-$20 billion by 2025.
The exponential growth of new technology has massive implications for those working in finance, and the ACCA has taken action to give members the edge in taking advantage of the FinTech revolution.
Strengthening IT and Digital Proficiency: The ACCA curriculum encompasses topics such as ‘Advanced IT’, ‘Cyber Security’, and ‘Data Analytics’ in order to grant finance professionals the essential digital know-how. Based on ACCA's research, nine out of ten employers require digital literacy.
ACCA regularly releases enlightening studies concerning the effect of FinTech, such as 'Ethics and Trust in the Digital Age' and 'Digital Leadership in Finance.' These assist in preparing members for upcoming movements.
3. Strategic Industry Partnerships: ACCA endeavors to incorporate the most modern tools and technologies into its curriculum and CPD programs by teaming up with tech companies such as Udacity, AWS, Microsoft and Salesforce.
ACCA is focused on equipping its members with updated skills in technology, moral understanding and leadership to enable them to lead their organizations into the digital era.
With 180+ countries as part of the ACCA network, it provides access to worldwide job prospects. Last year, 43% of the institution's Indian graduates began international positions.
Fintech is revolutionizing the roles of finance professionals, such as:
Auditors use data analytics and AI in order to conduct real-time audits. PwC's ‘Halo’ auditing suite looks at full sets of transactions.
Financial experts make use of automated advisory systems in order to provide individualized advice and predictions. JPMorgan's 'Analytic Intelligence' platform assesses intricate information.
Management accountants use cloud software such as Oracle's 'NetSuite' and automated reporting to give important information to assist in decision making.
Chief financial officers (CFOs) are responsible for incorporating technological innovations into the finance sector's strategic plan. Infosys' 'CFO-as-a-Service' provides virtual access to experienced CFOs as needed.
Compliance specialists are responsible for ensuring that regulations are followed as crowdfunding and crypto offerings evolve.
In order to successfully maneuver this shift, finance professionals must acquire new skills. ACCA provides their members with the necessary technical and ethical aptitudes to be successful in the digital era's evolving roles.
ACCA provides a wide range of accounting skills while certifications like FRM (Financial Risk Manager) from GARP provide a deep, internationally recognized understanding of risk management—the gold standard.
Despite India's noticeable economic expansion, the need for strong risk management is of the utmost importance due to billion dollar scams. Examples of risk oversight failures include the IL&FS collapse, the PNB fraud, the NSE scam, and the Srei Group default. In this regard, Financial Risk Managers can be instrumental in:
- Credit risk: Estimating potential losses, creating strategies to reduce credit risk exposure and decreasing bad debts.
Market risk entails assessing the probable losses that may arise due to changes in prices, exchange rates, and interest rates. Methods such as hedging using derivatives can be applied in order to contain this risk.
Examining operational hazards and recommending enhancements to people, systems, and processes.
Identifying deficiencies in financial models used for calculating value, predictions and capital division.
Seen as specialists in advanced risk management, Financial Risk Managers (FRMs) are sought-after around the world. In fact, the Deloitte 2022 Global Risk Management Survey determined that 82% of companies intend to raise their risk management budgets over the upcoming 3-year period. For professionals from India who hold an FRM certification, there is an abundance of chances available internationally in banking, consulting and the corporate world.
As FinTech revolutionises finance, ACCA are equipping their members to lead the transition, building upon their technological expertise while upholding a strong code of ethics. The FRM certification, in particular, prepares professionals to effectively manage risk. India's workforce must offer a blend of accounting knowledge and specialist skills to capitalise on global prospects in the digital age, and qualifications such as ACCA and FRM enable finance professionals to thrive in the years ahead.
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