AiThority Interview with Shagun Malhotra, Founder, SkyStem

Hi Shagun, welcome to our AiThority Interview Series. Please tell us about your journey in the tech industry so far.

I was educated in the United States and Switzerland and had briefly contemplated pursuing a career in fashion. I started my career in the travel and hospitality industry and ultimately fell in love with the world of audit, controls, and the accounting process.

Over the course of working in this industry, I knew firsthand the multitude of problems and risks accountants faced when employing manual methods to close the books and complete account reconciliations. Whether it’s a large corporation or a small company, closing and reconciling is part of the routine function in the accounting department. Although not the most glamorous part of accounting, it is the last line of defense to identify errors and/or fraud and hence a critical organizational process. I also realized that existing platforms that have automation in this area are priced quite high, and often beyond reach for mid-sized companies.

Mid-sized companies are often operationally complex, and can benefit from automation during the close, but may lack the excess capacity and resources to make a large investment and undergo a multi-month implementation. This realization became the spark that compelled me to found SkyStem, a SaaS provider that aimed to create an affordably priced solution to help automate month-end closes and reconciliations.

SkyStem’s flagship solution, ART, was brought to the market shortly after. ART’s main purpose is to modernize the month-end close and reconciliation process through automation. It was designed to meet four criteria: robust in features, easy to use, fast to implement, and reasonably priced. SkyStem’s core belief is that software should be robust, but never break the bank or cause unnecessary business disruption.

We have a heavy financial services presence in our customer roster which is where we got our start but have expanded into a variety of industries since then. We service public and private companies mostly in the mid-size space. We are obsessed with customer service and have enjoyed building out the product to feed into what customers really need. We have users in over 15 countries and look forward to more innovation in our product and in the industry.

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What book inspired you through your entrepreneurial journey?

I read a lot of books during the initial creation of SkyStem, but the book that stands out the most is “The Founders Dilemma” by Noah Wasserman. It was specifically relevant due to the tech nature of our business.

Founders often struggle with the best course to take in terms of investment, how to get co-founders, equity distribution etc. To take money or not to take money was personally my biggest dilemma. This book objectively discusses the pros and cons of taking outside capital. There is no right answer but there is an answer that feels right for an individual and the type of business they are pursuing.

This book covers all major milestones that occur during the lifecycle of a company and it was a great go-to book to remind yourself what options there are and how to navigate through that.

What inspired you to start Skystem and what were the main challenges you faced?

SkyStem began with a $4 billion dollar problem. I discovered broken internal controls while consulting at a troubled financial services giant, resulting in the balance sheet of over 10,000 accounts being off by billions of dollars.

This didn’t just happen overnight. Years of manual inefficiencies, the absence of consistent processes, and the lack of a centralized repository for spreadsheets and documentation created the monster. As a CPA and CIA, I experienced this situation and its recurring issues from both sides. I had empathy for accountants, understanding they were often working late nights with limited resources, and sympathized with auditors, who needed to hold companies accountable to the public.

The business spent a full year and millions of dollars fixing a mess that could have been prevented. Life would have been so different if there had been automation infused in this process. I realized that even large companies were grappling with manual processes despite having the resources. It made me think of how inaccessible automation was to those who didn’t have big budgets and how much they could benefit. Shortly thereafter, SkyStem’s flagship solution, ART, was born.

ART is a B2B SaaS product developed to help mid-market companies automate and streamline their month-end close. It was made with affordability and customer service as pillars of its ethos.

According to a recent industry study, financial executives waste 21.8 hours a week on repetitive tasks, but when you automate them, you set up your employees for more strategic work.

How do you see automation capabilities solving the productivity issues in the financial services industry?

Automation is a key to survival for companies. It has become a necessity rather than a nice to have and now provides a competitive edge. We work in the accounting space for month-end close automation but the benefits for automation in any area would provide similar benefits.

Here are some key benefits of adopting software/automation:

• Streamline  processes and create disciplined workflows
• Make it easier to review results for accuracy
• Embedded automation within reports means that they can be generated quickly and easily, eliminating the need to manually enter data and create them
• Reduce the risk of error or miscommunication

Companies are less prone to data loss due to power outages, as cloud-based systems automatically store data securely. Additional benefits include:

• Saves time spent on manual tasks, writing emails, following up
• Helps to reduce costs by eliminating the need to hire additional staff
• Obtains real-time information as it happens

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What are the new skills required to thrive in the evolving financial landscape in the Generative AI era?

Changes in customer expectations, and shifts in regulatory environments, demand a set of skills that go beyond traditional financial skills. Here are the top 3 skills that I believe could be a great add-on to traditional financial skills.

Data Analytics and Data Science – Skills in data analysis, including proficiency in data visualization, statistical analysis, and machine learning, are increasingly valuable. Financial professionals who can extract insights from large datasets are in high demand.

Digital Literacy – A strong understanding of digital tools, software, and platforms is crucial. This includes proficiency in using financial software, understanding blockchain technology, and navigating digital banking systems.

Coding and Programming – Basic programming skills, particularly in languages like Python and R, can be highly beneficial. They enable financial professionals to automate tasks, build financial models, and work with data more effectively.

Could you please throw some light on the modern digital literacy tools?

With so many digital literacy tools, we can take control of our own education for a myriad of topics without having to enroll in a college/school, etc. It’s been a boon in helping people stay connected and up to date with information that they need to enhance their skills and pursue all types of careers.

Modern digital literacy tools cater to a wide range of skill levels and areas of interest. Whether you’re a beginner looking to improve basic computer skills or an advanced learner seeking to develop coding proficiency, there are resources available to help you enhance your digital literacy. Education via these tools has been game-changing for any type of learning.

Although there are countless numbers of portals and tools in the market a few to note are as follows:

• Udemy –  Features a diverse collection of courses on digital literacy, computer basics, and software applications.
• Coursera –  Offers a wide range of online courses, including digital literacy and technology-related topics.
• Online Webinars and Workshops – Many organizations and institutions host webinars and workshops on various digital topics.
• Khan Academy –  Offers courses in computer programming, computer science, and mathematics.

Please share your thoughts on the organic and inorganic growth marketing strategies in the tech domain for SkyStem.

For now, we have focused most of our efforts on organic growth. We are a customer-funded company and are very proud of that. Our organic strategies have focused on 2 areas primarily:

• Product Development – we continue to build out our product by adding features and modules that continue to help accounting teams. Much of our roadmap is determined by our customers as we proactively solicit feedback and have made it a company goal to have at least 30% of our build comprise customer requests.
• Market Expansion – Starting last year we have seen an increase in international inbound inquiries. And although we have users in over 15 countries, we have not proactively targeted markets outside the US. Recently, we signed a large deal with a company headquartered in the Netherlands and this will begin our journey in the geographical expansion of SkyStem.

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What are your predictions for the future of FinTech?   

Fintech is a hot and lucrative space so there is bound to be a variety of growth, either directly or tangentially in this industry. The main prediction that seems imminent is the introduction and enhancement on Fintech products to take them further in helping humans do their jobs. This will definitely impact the products that SkyStem develops.

Other high level predictions include things like –

• Moving away from traditional banking to digital banking only
• AI-powered advisors (Robo-Advisors) that will be able to guide users through investment decisions
• Digital wallets and mobile payments will continue to replace cash even further
• There will be more banked people all over the world

With the advent of the above, there will be a need for more regulation and oversight with which will come different types of jobs and careers. 

Thank you, Shagun! That was fun and we hope to see you back on AiThority.com soon.