Key Financial Reporting Technology Trends for 2023

December 19, 2022by Team IRIS CARBON0


Bookkeeping as a concept has been around for much longer than we think. Ever since humans started trading goods and services with each other, they saw a need to record transactions.

With time individually held small businesses grew into large corporations with diverse stakeholders. However, it was in the 1800s that financial accounting as we know it today started shaping up with the introduction of the railroad corporation in the USA. Financial information and business transactions became vital information for investors and shareholders and needed to be shared.

The crash of wall street in 1929 following the debacle of the London Stock Exchange in September of the same year led to structured changes in market regulations. In the USA it led to the emergence of the Securities and Exchange Commission, or SEC formed by the passage of the U.S. Securities Act of 1933.

And gradually, several independent bodies came into existence like the IASC (International Accounting Committee) in the UK, established in 1973 but dissolved in April 2001, to constitute a new body called IASB (International Standards Accounting Board).  IASB is an accounting standard-setting body that issues IFRS (International Financial Reporting Standards) that are internationally accepted and required in 120 jurisdictions. Countries that developed their respective accounting standards also had IFRS as the base.

In June 2002, the European Union endorsed IFRS adding to IASB’s credibility and standardized financial reporting across borders.

The final step in the evolution of financial reporting was the emergence of digital reporting and XBRL.

Impact of Technology on Financial Reporting

Technology permeated every aspect of business over the last decade, and financial accounting and reporting are no different. The regulatory bodies have improved compliance mandates to increase transparency in financial reporting, and technology played a critical role in making that happen. In 1993, SEC mandated electronic filings through its Electronic Data Gathering, Analysis, and Retrieval system, EDGAR. Europe recently adopted ESEF (European Single Electronic Format) for the AFR filings for issuers regulated by the EU market.

And XBRL (eXtensible Business Reporting Language) emerged as the electronic format for financial reporting because of its ability to tag individual pieces of information. The introduction of inline XBRL or iXBRL made machine-readable information accessible to humans too.

Technology has made financial reporting easy for everyone involved in the process, from the finance and accounts team preparing reports to the regulators, investors, and others who use those reports. There have been several developments in the financial reporting technology space, and several more are on the horizon.

As we enter a new year, it is exciting to explore technology trends that will shape the future of the financial reporting space in the coming times.

8 Key Technology Trends for Financial Reporting

1. AI in Financial Reporting

AI has proved its usefulness and applicability across industries and in financial reporting. The AI market in fin-tech is expected to grow to $24.17 billion in 2026. AI’s growth is attributed to its ability to streamline and optimize processes and constantly improve them.

AI in financial reporting solutions can process, structure, and analyze large amounts of data, source information, detect fraud, and help manage risks better. The automation of manual work has increased both efficiency and transparency. AI has made it possible for Financial Reporting to become more than a mere record-keeping document. With multiple source data collection, real-time data analytics, trends, and forecast studies, AI has made financial reporting serve bigger organizational goals like strategizing and planning.

While AI’s benefits overshadow its risks by a long shot, it should be discussed anyways.

  • Data Security and confidentiality
  • Compliance with Regulatory Requirements
  • Control frameworks to ensure effectiveness

With limitless potential and the ability to impact the bottom line, financial reporting enabled by AI is a future-forward approach to financial planning and analysis.

2. Blockchain in Financial Reporting

Blockchain in Financial Reporting – Blockchain technology stores data in blocks and links to each other through chains. It is an immutable ledger that records and tracks every transaction, asset, and trade using the blockchain network. Tracking and tracing every piece of information is crucial for businesses, and the blockchain allows this at a better speed and efficacy.

Key attributes of blockchain technology that can impact financial reporting positively are:

  • Shared immutable ledger accessible to all network participants and eliminates duplication of effort wasted in recording data repeatedly
  • Immutable records which cannot be tampered with once recorded. Any changes or error correction is possible by creating a new data entry and not changing or updating the old one for transparency and traceability
  • Smart contracts for defining the conditions for transactions to reference a data source and respond accordingly

The access to information, the flexibility of control over their accessibility, transparency, and immediacy are some of the discerning features that make blockchain the next big tech trend for financial reporting.

3. Big Data and Financial Reporting

Big Data has emerged to be of significant importance for all industries but more so for the financial and the banking sector. The Big Data Industry is expected to grow to $655.53 billion by 2029.

Each transaction is a drop in the ocean of data which has the latent potential to provide strategic insights crucial for business growth and expansion. The financial industry is leveraging this data much better than its cross-industry peers, and financial reporting technology is playing a huge role in enabling them to do so.

While cloud-based financial reporting and analysis solutions were popular in 2022, the coming year will see a rise in predictive analysis using data. Another development will be ESG data collection and analysis in response to the ESG regulation and compliance mandates emerging across geographies.

Financial reporting technology solutions offering data analysis as a part of their platform will have to ensure features like:

  • Collaboration between cross-functional teams
  • Actionable Insights
  • Improved and integrated Data Security

Big Data Analytics and its applicability in forecasting, trend analysis, and planning for day-to-day and long-term goals make it indispensable for finance professionals and drive the financial reporting technology trend in the coming year.

4. OCR Technology in Financial Reporting

One of the challenges finance and accounts teams face is the effort invested in manual data entry, data reviewing, and fact corroboration of the financial and accounts documents like receipts, invoices, and purchase orders. Optical Character Recognition Technology is nothing less than a knight in shining armor. It can extract financial data (text, characters, fields) and information from scanned images and documents, convert pdf into excel and connect with ERP to create a seamless and accelerated digital workflow.

Converting physical documents into machine-readable text reduces cost, increases efficiency and accuracy, expedites data verification, and automates document classification. OCR technology is easy to scale and reduces the reliance on paper-based documents helping organizations go green.

5. RPA in Financial Reporting

RPA or Robotic Process Automation is fast gaining prominence in aspects of business that have been human-dependent. These processes are computer-based, therefore, can be easily automated using coded bots. Recent studies indicate that the RPA market size is going to $43.52 billion in 2029, which means rote tasks and cubicle work will decrease, and people will focus on the task of strategic importance.

Some overt benefits of using RPA are:

  • Consistent high-accuracy results without errors or inconsistencies
  • The control environment can benefit through audit rail tracking and improved quality of governance
  • 24X7 available bots can facilitate better talent deployment

While RPA cannot imitate cognitive automation like Artificial Intelligence or Machine Learning, the financial reporting process that doesn’t require human intelligence is fit for the bot. Some use cases include purchase order processing, primary-level account reconciliation, and revenue audits. With advancements in technology, the potential users will also expand in scope.

6. ESG Technology and Solutions

ESG reporting is changing the face of financial reporting and disclosure management across geographies. The regulatory bodies, investors, and customers alike are interested in ESG data and the performance of a business on ESG parameters. The global green tech and sustainability market is projected to grow to $51.09 billion by 2029, at a CAGR of 20.6%. The growth is fueled by market demand and regulatory compliance requirements.

A survey conducted by Deloitte resulted in 97% of senior executives stating that external stakeholders impact the company’s ESG reporting and disclosure policies. Even though the regulatory bodies have just caught up with ESG factors through compliance mandates, ESG investment has been directing the course of ESG reporting for a while now. The increasing awareness regarding a business’s impact on climate and communities are pushing the ESG narrative and rapid adoption of voluntary ESG disclosures by companies.

Technology will be pivotal in standardizing ESG Reporting for transparent and insightful disclosure to drive business and investment decisions. Digital reporting software, disclosure management platforms, ESG Data collection, integration, and analysis solutions will lead to tech trends in the ESG Technology space.

 Learn more about ESG metrics and effective sustainability reporting here

7. Automation for Compliance and Disclosure Management

A company’s story that it wants to share with internal and external shareholders relies on the narrative set by the data. The data explain the trials and tribulations, the ultimate quest or organizational goals, and the resources used along the way. The additional plot line of the ESG impact of the said quest is now an integral part of the tale. Compliance and Disclosure management are sensitive tools that help companies tell their stories to regulatory authorities, investors and customers.

Data being central, errors, inaccuracies, and insufficiencies can lead to legal and monetary implications. Accuracy is the key, and automation in compliance and disclosure management aids in enhancing efficiency and quality.

Automation can help reduce manual tasks, and the team of experts step in only to check fact relevancy and data analyses which are subjective and can’t be automated. An automated compliance and disclosure management process takes a large chunk of base-level work and helps the compliance team to find more time to focus on other strategic tasks.

Automation can help in

  • Reduced turnaround time through workflow automation
  • Consistent Quality
  • Better accuracy due to fewer manual entries
  • Data Integration
  • Standardization
  • Mitigation of risks
  • Audit trails
  • Centralized Portals

The expansion in the market size for compliance management and disclosure management software indicates their applicability and relevance for businesses.

8. Global Compliance and Reporting Solutions

Businesses are not bound by geographies anymore. Globalization has meant new markets, multiple jurisdictions, innumerable regulatory bodies, and compliance mandates. The finance and accounts team often lack the expertise to manage global compliance and reporting requirements and rely on local service providers. Such a structure offers limited scope for streamlining the compliance process at a central level and restricts access to valuable business insights.

Some key challenges of compliance and reporting across jurisdictions are:

  • Localized accounting standards
  • Ever-increasing transparency requirements
  • Localized compliance timelines
  • High penalties for non-compliance
  • ESG reporting

A global compliance and reporting solution suite can help the compliance teams navigate the cross-sectionality of finance and tax effectively to record and report financial information. A governance risk and compliance framework specific to the business requirement can streamline and optimize compliance and reporting structure to reduce costs and non-compliance risks.

The focus is on traceability solutions (tracking logistics and supply chain) in compliance with regulatory norms, accommodating the new mandates like ESG reporting, reduced implementation timeframe, and data analysis for insights.

Global organizations need future-ready tech solutions to match the accelerated pace of changes in regulatory requirements and frequent updates in indirect tax requirements.


Financial reporting and compliance have leveraged technology for better efficiency and accuracy. Financial data insights provided by data analytics solutions, AI and Machine Learning have made financial reporting more than a mere ledger-maintaining exercise. Future technological developments are going to only expand the scope and make financial reporting easier to record and report.

IRIS CARBON® wishes our readers, customers, and partners a very Happy Holidays.  

IRIS CARBON® offers products for XBRL/iXBRL Reporting, Disclosure Management, ESG Reporting and XBRL Analytics for your business and regulatory compliance needs.

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