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Preparing for Future in Finance in a Digitalized World
Is there a Job in the Future?
There’s a lot of buzz nowadays with regards to digitalization and how we all need to be ready for significant changes in our working environment and businesses. We’re beginning to feel the impact of these changes in the Finance and Accounting field and ecosystem. Thus, the biggest fear that may linger in the minds of finance practitioners and students, as these ‘digital disruptions’ occur, would probably be, if there will be any relevance or jobs for them in the future.
The pleasant news, in my opinion, is that there will always be finance related jobs going into the future, but the type of work that’s being done now, will evolve to something much different, which, at this point, seem to be moving in the direction of designing financial models, financial/data analytics and planning/forecasting. In other words, the nature of how we do things (or use to do) would branch out into different directions or dimensions, and could probably be very new to current finance professionals.
Taking a step back in time
So let’s deep dive a little into this perspective. Taking a step back in time, if we did ask our fore-fathers and friends who used to do finance and accounting functions in the past, such as bookkeeping, reporting, tax matters and so forth, they’d surely make statements which reflect on how much ‘brain power’ they would use in calculations, filling up forms, filing documents, managing logistics manually etc. and probably boast about using some groovy mental arithmetic methodologies.
This, over time, changed, to some extent, with the onset of pocket calculators in the 70s. These machines did help with accuracy and speed, but also paved way for larger volumes of casting to be done, which in turn, required more finance personnel. Overtime, computers and spreadsheets came about, such as Lotus and Excel, which changed the landscape tremendously. Again, this paved the way for even more information and data to be processed and analysed, in turn, requiring a lot more finance personnel.
Our jobs had also somewhat evolved from the preparation of mere simple financial reports to complex reports with multiple dimensions of the same set of information and data using these spreadsheets, presentation and documentation softwares. These were to facilitate any decision making by the various stakeholders, with the hope that good decisions made. Prior to this, a lot of decisions are made through conscious (or subconscious) analysis of the reports, information and data provided, very much dependent on the decision makers’ vast experience and intelligence (nevertheless, this is still very important!).
Digitalization of Finance Function
Thus, keeping this momentum going, we’re at a stage now, where there’s a lot of activity on going with regards to digitalizing finance functions, by putting in place systems that allow for transactions to be processed ‘straight through’, encompassing the entire spectrum of processing including accounting entries, exception reporting, reconciliations, management and financial reports, financial analysis, budget setting and not to mention, the triggering of next actions steps (which can be associated to the topic on Machine Learning, Predictive Analysis and Artificial Intelligence).
These developments would naturally give many people the impression or feeling that there’s no room for finance personnel in this end to end process, which in turn, may result in negative ‘resistance to change’ behaviours that can slow down or affect the progress of organization towards their digitalization plans and business goals.
So, what should we expects from all this? Generally, we will need appreciate the fact that the roles finance personnel would eventually (or probably have begun to) move to the ‘peripherals’ of the activities being done now. Basically, if you’re currently doing work that’s related to compiling or imputing data, analysing them, preparing reports, filling up budget templates and probably doing some forecasting, all this can and will be automated. But your roles will move away to the ends of this chain of processes, where you will assume roles that would require the preparation of a functional design of the system that would handle these processes, ensuring the designs are customized and caters for all the various scenarios that could possibly happen, ensuring the accounting entries and analysis meets the required standards, preparation of test plans and scripts required for testing the system and actually performing the tests, ensuring proper reconciliation reports are produced for monitoring etc. Furthermore, roles will also focus on monitoring system performances and activities via the reconciliation reports and exception reports and ensuing activities to manage these exceptions are well undertaken and executed.
In addition to this, one particular role that is already being dwelled into large scale as a result of the digitalization and automation of processes in organizations, is financial/data analytics, planning and forecasting, using unstructured data, with the idea to transform some of it into structured data sets, which can be used predictively. Very commonly used terminologies which we tend to come across nowadays includes Big Data and Data / Text Analytics, and the various business intelligence platforms that assist with managing these large sets of data. This is one area where, the demand for finance workforce would probably be, gazing into the future.
As data is made available and in abundance, there will be a need to analyse them and structure them to provide fresh insights, facilitate strategy and business plans. This has become the focus of many businesses. Having such detailed insights into consumers’ demographics, spending and transaction patterns, lifestyle preferences, emotions, social media activities etc., and matching these with detailed consumer level spending analytics and forecasting, would set the stage for businesses to be extremely competitive or possibly give them the competitive edge in whichever industry or landscape they operate in.
Let us Prepare for the Future
Thus, in general, drawing a parallel to how advancing technology over the years has changed the global business and communication landscape, where we are connected 24/7, with loads of information transfers, and continuously giving us the feeling being overloaded, it has also created an abundance of opportunities for people in terms of employments and business. The finance profession is beginning to experience such advancements and changes, and its best we acknowledge and prepare for these changes by acquiring these new skills sets or even influencing curriculums in educational institutions to do so accordingly, in order to be ready to seize any opportunities along the way.