Meeting 2024’s Financial Services Industry Challenges | Deloitte US has been saved
By Kevin Richards, US Financial Services Leader | Audit & Assurance Partner
Talking points
- Financial services institutions are undergoing transformative change, and accounting and finance professionals can play essential roles.
- True transformation can require a penetrating view of the organization to match people, skills, and technology against market, competitive, and regulatory realities.
- New technologies—particularly generative artificial intelligence (Gen AI)—can raise both promise and peril. Organizations that engage with them could benefit enormously.
Financial services institutions are transforming themselves—and accounting and finance professionals can play essential roles in helping ensure their organizations have empowered and equipped their people to function effectively in today’s demanding environment.
That’s the message I take from the 2024 financial services industry outlooks, Deloitte’s exploration of trends shaping financial services. In every sector, firms face stark challenges—in the economy, regulation, and technological turbulence—and must become even more agile to survive and thrive. Many companies are embracing technology, including such disrupters as generative artificial intelligence (Gen AI) and quantum computing, to help them work faster and smarter.
What roles do accounting and finance play?
Bolting on new technology isn’t going to help institutions transform to cope with the instantaneous reactions and high stakes of the financial markets. True transformation requires a penetrating view of the whole organization, matching people, skills, and technology against the new realities of markets, competition, and regulation, such as these selected industry examples:
- Banks are absorbing and adapting the best features of fintech competitors while meeting customer needs and regulatory strictures.
- Insurers are reimagining their role as “financial safety nets” to become partners in preventing or mitigating losses before they occur.
- Real estate firms are addressing years of amassed technical debt by ramping up technology capabilities.
- Investment managers are meeting demands for customized portfolios and better client experience by shaking up traditional strategies and corporate cultures.
Accounting and finance professionals are uniquely positioned to help lead such transformation. Today’s CFO wears many hats—talent, technology, and strategic, alongside the financial hat—and generally has insights into every part of the organization. The CFO often must be a primary source of financial truth in the organization, commanding the data and the strategic perspective to advise on all aspects of business. Accounting and finance can help create strong controls around new structures and new technology so they can operate in highly regulated businesses.
Accounting and finance professionals are uniquely positioned to help lead transformation. Today’s CFO wears many hats—talent, technology, and strategic, alongside the financial hat—and generally has insights into every part of the organization.
What is the impact of regulation?
Lately, the regulatory burden has been growing continuously. On top of a flow of financial regulations, there are also new rules governing privacy, cybersecurity, data handling, and artificial intelligence, along with requirements issued or coming soon for environmental, social, and governance (ESG) reporting. Operating globally, financial institutions must meet the demands of multiple jurisdictions—while keeping customers at the forefront.
Here, too, accounting and finance can play key roles. Consistent data, clear reporting, and strong internal controls can be essential to meeting growing regulatory demands.
How will transformative technology drive change?
Another theme I am hearing more and more from clients centers on the promise and peril of new technologies—particularly Gen AI. Leaders recognize that smart use of Gen AI can make their business more operationally effective, better at serving customers, and more competitive. They want to capitalize with the best uses and appropriate controls.
But I hear another question: Could AI put us out of business? Whether it’s wealth managers designing portfolios or investment bankers underwriting IPOs, many are worried that an upstart could use AI to automate their functions and take away their customers and revenues.
I point clients toward the history of technological upheaval. Organizations that anticipate and adapt often undergo significant change—but they can endure. Fewer households have landline telephones, but the vast majority of middle-class households have internet—often through former cable and telecommunications providers. Financial institutions that engage with new technologies are more likely to prosper.
How can Deloitte help?
These are turbulent but exciting times for financial services. New challenges come every day—but so do opportunities for growth and success. With our wide-ranging experience and insights gathered from thousands of audit and advisory engagements, Deloitte’s team is well-equipped to advise organizations to address these challenges.
I would encourage you to review the outlooks and think deeply about how transformative change is affecting your organization. And I invite you to reach out to me or my colleagues to see how Deloitte’s insights can help.
Get in touch
Kevin Richards
Deloitte & Touche LLP
Kevin, partner at Deloitte & Touche LLP, is the Audit & Assurance leader of the US Financial Services industry practice with more than 20 years of experience serving some of our most prominent clients with national and global footprints. He has coordinated and led complex multilocation audits and has supported management teams through IPOs and a wide range of capital market transactions, SEC reporting, acquisition due diligence and accounting, and general business advisory. Kevin has a wide range of client leader and industry experience, from real estate to investment management, and also served as a technical accounting resource for the US Audit and Advisory practice.
