Accounting’s Use of Big Data Will Double This Year

Rising from a virus-caused pessimism about the economy and their own business, finance leaders are beginning to feel more confident about the future.

The third quarter Economic Outlook Survey from the AICPA shows optimism rising strongly among CFOs, CEOs and controllers about most parts of their business, and especially about revenue and profits.

There’s also improvement from the second quarter survey about the US economy, though a deep worry still prevails.

Quarterly, the Association of International Certified Professional Accountants surveys its CPA business and industry members in nine areas including the overall economic outlook, their own organization’s outlook, employment, expansion plans and revenue and profits. The results are tabulated to create an overall CPA Outlook Index and individual category measures.

The overall Outlook Index improved to 54 from 38 in the second quarter. A reading above 50 is considered a positive or optimistic sentiment. The second quarter’s reading was the lowest since the 2009 depression year.

Though only 24% of the respondents were optimistic about the US economy, it is an improvement of 4 points over the previous survey. The AICPA says the optimists “cite the possibility of pent-up demand and lower energy costs, along with resilience and innovation.” The pessimists point to the continuing COVID-19 disruption.

When it comes to their own business, the survey respondents are much more optimistic. For example, 43% say they have plans to expand their business, a 19 point increase from the 2nd quarter survey. And in a case of doing less bad, revenue and profits over the next 12 months are still expected to be down, but by much less than previously believed.

Headcount is about where it should be, say 55% of the respondents, a percentage that hasn’t changed much even since well before the pandemic. However, fewer companies now say they are overstaffed than was the case just a few months ago. And the percentage of companies planning to hire, still well below the 25% of a year ago, has nearly doubled since the last survey.

The Outlook drills down into industry sectors and geographic regions, most of which show growing optimism.

Photo by Austin Distel on Unsplash

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What the ATM did for getting cash, the covid pandemic is doing for many other banking services.

More than ever, customers are turning to online banking to pay bills, transfer funds, and handle transactions they would have visited a branch for just a few months ago.

Baby Boomers, the generation most reluctant to have downloaded their bank’s mobile app, have embraced online banking in record numbers. Shortly after businesses were ordered closed, The Senior List found 77% of older Americans had conducted a financial transaction online.

This embrace of mobile banking is one of the banking trends that is here to stay, says an article in Forbes.

“It’s not just Boomers who are swiping right on online banking,” says Forbes. Citing a Boston Consulting Group survey conducted in June, the article notes that in the first three months of the pandemic 44% of 18-34 year olds enrolled for the first time in online or mobile banking.

Overall, Fidelity National Information Services, a service provider to the banking industry, reported new mobile banking registrations increased by 200%, and mobile banking traffic increased 85%.

“Once customers experience the convenience of mobile, they very well may never go back to traditional banking,” the Forbes article says. The Boston Group found a quarter of the new remote banking users claim they will visit bank branches less frequently in the future or not at all.

While e-commerce has exploded during the pandemic, banks have taken steps to streamline the payment process in brick and mortar stores. Forbes says some banks upgraded physical debit and credit cards to enable tap to pay. “Consumer usage of platforms like Apple Pay and retailer deployment of embedded contactless payment terminals like Square has also reached unprecedented levels,” the article reports.

In one area that before COVID hadn’t attained much traction, fintech startups and the industry generally have seen a spurt in demand for money management tools. Though 75% of respondents to a survey reported never using a personal finance app, since the pandemic 16% have. Here, it’s Gen Z and Boomers that are more aggressively turning to these services. A SYKES survey reported 23% of Gen Z and 18% of Boomers said they were new users to personal finance and budget apps.

“Fintech is an ever-evolving landscape — and it’s one that the pandemic has sent shock waves rippling throughout,” says Forbes, which concludes on this note: “Thanks to fundamental shifts in the way consumers perceive and depend upon digital finance tools today, these fintech trends just may stick around long after people have holstered their hand sanitizer.”

Photo by CardMapr.nl on Unsplash

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