Some say that making predictions is for fools and economists. It’s safe to say that Ryan Pearcy, Director of SB Digital, and Simon Pinion, Business Advisory Partner at Scrutton Bland, don’t describe themselves as economists. That said, just like they have done in prior years, they will attempt to predict what will be big for digital in 2023.
In previous years, their predictions have had some success. They predicted the boom in payments utilising open banking. Admittedly, they may have been out by a year, but we are still counting it as a win. Their forecast on the predicted rise of AI applications, especially with the success of ChatGPT at the end of 2022 has been spot on, and the boom in video conferencing was also on the money.
So what are Ryan and Simon predicting this year?
The delayed digitalisation of micro businesses
HMRC granted micro businesses an early Christmas present in December when they announced a delay to the deployment of Making Tax Digital for Income Tax and Self-Assessment from April 2024 to April 2026. The increase in income threshold to £50,000 (and ultimately £30,000 from 2027) from £10,000 will also remove the need to digitise for a large numbers of tax payers. With many accountancy firms preparing for rollout of digital systems to their clients in 2023 it is inevitable that this will be delayed to 2024 or 2025 to help spread the burden of work. But is this a blessing or a curse? In our experience it is businesses that digitise who can generally display better awareness of their numbers and with it an improved cash flow.
Period end apps
For those businesses that have already transitioned to digital ways of working, the continued development of new apps that solve business problems is never-ending. If you use Xero there are thousands of apps that can automate areas of your business, from lead management through to payments and event bookings. So – what will be big in 2023? We predict that solving period end close issues and improving data quality for businesses will be a big focus. Some apps in the past have dabbled in this with partial success but there is an increased emphasis on developing this area, with some exciting apps likely to be released towards the end of 2023. Why is this exciting? Well it has the potential to massively disrupt the accountancy sector, automating a large part of what accountants do, both for firms and those in industry.
The death of cryptocurrency?
2022 was a strange year for many reasons, but those investors that held cryptocurrency will surely be happy to see the back of it, with Bitcoin (which is a good guide for the crypto market) losing 64% of its value through the year. So – what is likely to happen to it in 2023? Realistically it is unlikely to see a surge upwards. Confidence in cryptocurrency remains low with expectations for more failures and governments now warning banks about working with the currency. Without significant support from government backed stable coins it is unlikely to stabilise and increase in value. Will it die completely? There are still too many adamant supporters for it to completely disappear, but there will need to be a huge shift in how it operates for market confidence to improve. We envisage crypto shifting and rebranding itself in 2023 but we believe it won’t be until at least 2024 before it comes back. Will it be the same or look completely different? It is too early to tell, but don’t expect your crypto assets to bounce back soon.
Development of 5G networks
The deployment of 5G networks is expected to accelerate, bringing faster data speeds and more reliable connections to more areas. This will ultimately enable other areas of advancement such as the continued roll-out of augmented reality, reducing the lag and increasing the geographical areas where these solutions can be applicable. For example, with the continued rollout of electric vehicles, it is only a matter of time before augmented reality displays will be added that highlight potential upcoming issues or advise better navigational routes. 2023 will likely be a transition year where the networks are improved, ahead of any noticeable experiences for the end user.
Surely the biggest advancement in artificial intelligence has been the widely publicised viral success that is ChatGPT. A system that can write like a human, in a way that is difficult to tell if it is a robot or not is sure to have a huge impact on society. Individuals are already using this tool to create and release content at 10 times the usual writing speed. This will surely have a huge impact on content writers and improve accessibility to creating content for those that are unsure how to start. Not heard of it or unsure how it works? Well we asked ChatGPT to make a tech prediction for 2023 and the first sentence in this prediction is what it created. Could you tell? Admittedly there are weaknesses with ChatGPT in that it isn’t connected to the internet so it is reliant on the data that is uploaded to it. This has meant the predictions it made were a year or two out of date, but the quality it created was great. We strongly advise giving it a try.
We often focus on software in these predictions but we also like to make hardware predictions as well. Unfortunately, we don’t envisage any big releases or huge gamechangers in the market in 2023. One thing we do expect to surge is gesture control. We have seen voice control take hold and become mainstream, especially on phones and smart devices, but gesture control was initially limited to focussing on light switches, with a boom in sanitary areas such as sinks and hand dryers as Covid took hold. This boom has helped demonstrate the effective use of gesture control for reducing the spread of contagion, and combined with energy efficiency benefits in a cost-of-living crisis we expect rollout of gesture-controlled technology to accelerate during 2023.
So what are the current driving factors for technological advancement? The continued prevalence of Covid is one, as it refuses to go away and has a significant impact on the world as a whole. Impending global recession will be another driver as more businesses use technology to help reduce costs and streamline their operations. Combined with this is a lack of skilled talent in the workforce. Many industries require skilled employees that are just not available in the market, and when that occurs they turn to technology to solve the problem. The one negative to all this is that there has been a roll back in investment within technology companies. The impending recession has made investors more prudent and so those riskier ventures that ultimately become game changers are currently less likely to get the funding they need. The end result is an increased rollout of proven technology and a reduced chance of any major disruptors making waves in the market.
With so much changing in the digital landscape it is imperative to talk to independent professional advisers in this field. At Scrutton Bland we value the importance of financial technology solutions and have created our SB Digital Service to help both business owners and accountancy firms’ clients stay ahead in this field.
To find out more about our SB Digital Service or to speak to one of the team about you and your clients’ software structure and applications please email email@example.com or call 0330 058 6559.