Big Four face AI threat from agile smaller firms, says ex-EY boss
The professional services landscape is undergoing a significant transformation, with Artificial Intelligence (AI) emerging as a powerful disrupter that is leveling the playing field for smaller, agile firms against the traditional dominance of the Big Four accounting and consulting giants (Deloitte, PwC, EY, and KPMG). This shift has been highlighted by Hywel Ball, the former UK chair of EY, who emphasized that the Big Four's own investments in AI are "doubly important" as he takes on board roles at two start-ups.
The rapid advancement of AI, particularly in areas like agentic AI, is redefining how professional services are delivered. These intelligent systems can perform tasks and make decisions autonomously, signaling a fundamental shift in traditional consultancy business models. Smaller, tech-led consulting firms are leveraging AI to deliver expertise with unparalleled speed and accuracy, often surpassing the capabilities of human consultants by analyzing vast amounts of data and identifying patterns instantaneously. This not only enhances service quality but also significantly reduces costs by automating routine tasks such as data collection, analysis, and reporting. The flexibility and innovative capacity of smaller firms, unburdened by legacy systems, allow them to quickly adapt to changing market conditions and client needs.
The Big Four are keenly aware of this evolving competitive landscape and are making substantial investments in AI themselves. Deloitte and EY, for instance, have launched agentic AI platforms like Deloitte's "Zora AI" aimed at transforming traditional consulting practices, assisting with financial tasks, and supporting tax professionals in data management and compliance. PwC is focusing on responsible AI and trust, while KPMG has announced plans to invest $2 billion in AI and cloud services. These investments are intended to enhance efficiency, achieve cost savings, improve accuracy, and allow for greater scalability in operations.
Despite these significant investments, the Big Four face the challenge of integrating AI into their vast operations while also addressing the potential impact on their workforce. Some experts, like former PwC partner Alan Paton, suggest that AI-driven automation could lead to a substantial reduction in roles within the next three to five years, particularly in audit, tax, and strategic advisory services. While this presents a challenge, leaders at firms like EY and KPMG remain optimistic, asserting that their scale and expertise uniquely position them to deliver comprehensive AI solutions and manage associated risks.
The integration of AI is expected to have a ripple effect across the broader accounting and consulting industry, raising the bar for service quality and efficiency. As the Big Four lead the way, other firms will likely follow suit, accelerating widespread AI adoption. However, firms must also proactively address ethical and regulatory considerations, ensuring transparency, accountability, and fairness in AI applications to maintain client trust. The competitive pressure from smaller, agile AI-focused firms underscores the critical need for the Big Four to continue innovating and adapting to maintain their dominance in the professional services sector.