The future of finance: technology or people?
Not only is technological innovation unfolding at breakneck pace, but the reach of its influence is exponentially expanding as well.
Digitalisation is disrupting a broad swath of industries, and finance is no exception. With new financial technology start-ups reimagining banking and accounting, CFOs from companies across every industry have been empowered to change how they work, and often for the better.
But in financial services, as in any industry touched by the spark of technology, questions remain – how much will technology influence the future of finance? To what extent will automation dominate the financial field? And what will remain for the white-collar workers, long reliant on legacy enterprise roles? The answers are not exactly clear.
What is clear is that technology is ultimately only as good as the people who create, implement, and work alongside it.
As such, the future of finance should be one driven by innovative people who leverage their expertise and skills to drive transformative strategies that propel their companies – and the people who depend on them – forward.
Simply put, the dichotomy between technology and people is a false one, and fintech offers significant promise for people across industries.
The fintech explosion
In the past decade, the fintech sector has exploded. Before the COVID-19 pandemic, the fintech adoption rate doubled every two years, and the industry’s market value is expected to reach $324 billion by 2026. As its growth continues, the vertical’s products and services will become ubiquitous across the global economy.
This fintech explosion comes amid rising demand for new efficiencies in key financial processes, with a recent PwC survey on the future of finance reporting that 65% of respondents view automation processes as a critical priority for their future finance functions.
The advantages of such technologies abound: they can generate powerful new insights by scanning and analysing vast amounts of financial data at lightning speed and can automate financial planning and analysis (FP&A) processes that would otherwise be manual and tedious.
The financial professionals who are able to find savvy applications for fintech within their larger operational strategy will find that it can alleviate labour-intensive manual processes.
Previously manual tasks such as gathering and consolidating data, building and running calculations, or cross-checking input accuracy can be carried out faster and for less.
This streamlining allows CFOs and their teams to put more time and energy towards important strategic decisions, rather than wasting resources on mundane tasks, all while providing them with the most up-to-date, accurate information to inform those decisions. The impact of such a new dynamic can be transformative.
But the tech itself cannot facilitate this transformation. Human leadership is critical in conceiving these changes and carrying them out in a seamless, effective way.
A recent EY survey reports that 69% of those polled believe the role of finance chief will change significantly as traditional financial tasks become increasingly automated. The most successful companies will be those that are able to integrate new technologies and cater them to their specific business needs.
New FP&A platforms offer a variety of tools, but it is up to employees to decide which tools to use and when. Financial managers who can adapt to, keep pace with, or even get ahead of these impending changes will change their companies for the better, allowing themselves and their employees to shine.
Data: the key ingredient
Data is the underpinning element around which technological and human co-innovation revolves. If data is the raw material, technology is the tool to process it and make the key indicators easily accessible, which employees then shape into a plethora of strategic data-driven insights.
And with data-driven AI, systems can also use machine learning to improve and streamline their platforms, further facilitating the speed and effectiveness with which financial departments can undertake new projects.
With that in mind, it is immensely important to ensure that the raw data is reliable from the get-go. AI technology can also be leveraged to provide an initial “auditing” of the data, with humans doing the final oversight to ensure that the data aligns with their expectations.
For any financial organisations hoping to tap into the promise of fintech, it will be crucial to adopt an innovative ethos that permeates the entire organization without allowing the nitty-gritty of tech implementation to overshadow the strategy it is meant to support. Digitising for digitisation’s sake, without keeping big-picture company needs in mind, is a recipe for failure.
By now, it is clear that irreversible changes in the financial world are imminent, and the blistering pace of technological change has some C-level executives worried.
But if done properly, embracing innovative fintech – technology that is simultaneously powered by and empowering for skilled workers – will be the determining factor for which businesses get ahead of the pack and which continue running in place.
About the author
Didi Gurfinkel is the co-founder and CEO of DataRails.
Didi was previously the GM at Cisco and holds a BSc in economics and computer science and an MBA in business management.