As a CFO with a bit of IT background, one of my major tasks in the 1st half of the last 2 decades was convincing all functional departments to utilize technology in order to reflect business healthiness more objectively, accurately, comprehensively and in a timely manner. In the 2nd half, it has shifted to calming down the panic about pervasive technology with actionable directions.
Indeed, the role of information technology has changed from a facilitating tool to the center of gravity enabling disruptive changes, and the underlying question that has risen is, how do we transform FinTech from a “disturbing” to “exciting” factor?
First, artificial Intelligence and big data become real. We have been hatching on the moment for 40 years since the data warehouse came into shape, and yet it was not until the relevant data was big and deep enough and the analytic tool sophisticated enough to understand the data, that we could announce the arrival of the powerful Big Data Era. Finance industry is probably the most familiar group with interpreting data while now the data interpret themselves with AI and deep learning. This is where the panic comes from, and where a prevailing question, whether finance would become obsolete, pops up. My answer is simple: financial analysis is evolving from interpreting data to interpreting the interpretation of data. Human beings cannot handle the volume of Big Data any more while we are still far ahead of computers on connecting data to realities today. Only by embracing and taking full advantage of the advancement of AI and big data, can we fully capitalize our value as human to rationalize the results, which is pivotal to the success of AI applications today.
"Only by embracing and taking full advantage of the advancement of AI and big data, can we fully capitalize our value as human to rationalize the results, which is pivotal to the success of AI applications today"
What are the implications?
1) Less simple data interpretation tasks
2) More judgmental interpretation tasks requiring more real-life business experiences
3) More operating with robot (AI).
Second, naturally IT application skills in future, like Excel/Access skills today, will become basic qualifications for finance staff. In the industrial world, a robot that works with people is called co-bot. People that work with a co-bot have different qualifications from traditional manufacturing workers. This is exactly how the finance job profile will evolve. If tasks like data analysis, JE booking and etc., are done by robots, I would not be surprised that to debug a robot will become prerequisite in finance profile in few years. It is not that different from the age when accountant had to change from physical booking on the paper to booking in system. It would cause massive discomfort, yet the finance industry just proceeds in a different way, not vanishing. The only answer is learning.
Third, revolution is on in banking and treasury management. Regardless of lots of innovations in banking industry in the past decades, it is true that cheque, a financial vehicle invented 500+ years ago, is still in use today. However, it will be ended with the development of blockchain and relevant payment solutions. All the historical investment and knowledge will be greatly impaired. Recommendations:
1) If you are planning a big investment in this field, unless you are the industry and technology leader, rethink it.
2) If your company cannot afford to be the first adaptor (most companies cannot), please stay tuned and catch the wave when the standard is built.
The fact that FinTech becomes one word implies that we may not be able to define their own boundaries very soon, including infrastructure, knowledge, talent etc. My way of deciphering it starts with upgrading the talent with the knowledge for the future. To surf like a “pro”, we shall stay on the water.