It is tempting to think of automation as one thing that will affect the whole business. What this overlooks, however, is that some functions adjust better to automation than others. While one area might be automated with little to no trouble, it may be more of a struggle for others, leading to an uneven tech structure.
Dr. Sean Stein Smith, a CPA and Lehman College professor who founded the Institute for Blockchain and Cryptoasset Research, believes that much of the low-hanging fruit in terms of what can be easily automated has already been picked, leaving behind more pernicious problems, such as payment technology.
Smith contrasted these areas with audit and federal taxes. These two areas, he said, are some of the strongest in the accounting solutions world today in terms of automation capacities. While every client is different, the processes and procedures for a simple tax or audit engagement don't usually have a lot of variation. These are repeatable, standardized processes that use similar types of data in familiar formats. It makes sense that these were the areas where automation could be most easily applied.
Meanwhile, according to Smith, the areas that resist automation the most are ones where there are fewer standardized processes that require more judgment calls on ambiguous situations, such as payments and benefits.
"The areas in which there have been some obstacles are payments and anything to do with any benefits statements. So while audit and tax have gotten the 'best' tools and apps to help people, there are still a ton of headaches on the payment side and anything to do with any HR data or even local income tax data. [These] are the areas that are having the most obstacles, since they're mostly all individual. Every project has its own attributes," he said.
This becomes even more difficult with crypto assets, which take all the difficult-to-standardize variables in payments and add even more. As just one factor, he said that whenever anyone tells him they're doing a massive automation overhaul linked to crypto, the first question he asks is whether their cyber policies are up to date due to the likely changes in business processes and internal control structure.
Difficult to automate, however, does not mean impossible. In the crypto space especially there has been a lot of work to try and address this issue. This is part of a larger push he has noticed to work digital assets into the greater payments space. Many of these efforts, he said, attempt to bypass traditional banks completely, pointing to the rising number of transactions handled by non-bank entities. This alone, he believes, will change the dynamics of the payments arena.
"Having more and more payments and transactions handled by nonbank entities will alter how accounts receivable works, how accounts payable works, and really these corporate treasury tools and applications will have to evolve," he said.
While technologies like virtual reality, augmented reality or the metaverse might play a role in this evolution, Smith was skeptical they would form the basis of it, because despite their potential they're not quite ready for these complex problems just yet. Instead it will likely come down to the use of more conventional automation tools and techniques like bots and robotic process automation, the value of which still hasn't been completely harnessed by everyone.
These efforts will need to avoid the pitfalls he has already seen in other highly automated areas. For instance, people need to avoid a "black box" mentality where data goes in and data comes out, but there's no idea what happens in between. He has seen many situations where people automate a process without fully understanding it, leading to bad automation results. Another thing to keep in mind as part of the larger discussion on integrations and interoperability, particularly where it regards crypto, is backward compatibility. He has not been especially impressed with what he has seen so far on this front.
"Any new app accepting crypto payments or automating something — great stuff. But all that stuff has to work going backwards, being backwards compatible. Oftentimes it's not quite up to par on that side. Patches and bridges and workarounds and manual overrides and all that just make the whole process more complicated," he said.
But by the time these problems come to the fore, payments technology — especially crypto payments — will necessarily have to advance past the point it's at now. When that happens, the challenges that they present will be quite similar to the automation challenges in other areas and the discourse will become more mundane.
"I talk about [these things] constantly, but probably by 2028, 2030, the overall conversation will not have gone away entirely but it will fade into the background because of the increasing integration of these applications into everyday life. As blockchain becomes more common and mainstream, it will become more important but not talked about every day," he said.
