Mamun Rashid, Managing Partner, PwC Bangladesh (Pvt) Ltd.
Today, we are discussing the future of finance, and the ever-evolving job of a finance manager. We have to try to create pathways for future chief financial officers (CFOs) in the era of artificial intelligence to become business controllers, planning managers and heads. We are also celebrating the launch of the joint report titled “Finance: a journey to the future?” produced by ACCA (the Association of Chartered Certified Accountants) and PwC (PricewaterhouseCoopers).
This report explores the future of finance given the technological changes taking place. Skills, process, culture, technology and data are the five dimensions underlying the evolution of finance. The report was prepared with the aid of workshops, interviews and surveys, conducted in a range of industries and geographies with leading professionals. Six hypotheses came forward from the 1,100 responses received.
The biggest barrier discovered was the mindset change in leadership. The role of finance, perhaps due to differing perceptions of different generations, is somewhat misunderstood. It was also found that there is a need to focus on the inside agenda and access to data, both internally and externally. Technology is not only about costs but it may also assist in adding value to a business. Headcount reduction is a by-product of technology, but not the objective.
Masud Khan, Chief Advisor of the Board, Crown Cement Group
Financial reporting, taxation and management reporting are basic components of accounting. Financial professionals can add value to businesses by working with other operations of the company. Whenever a business issue emerges, the cross-functional team of finance, marketing, sales, logistics, production, etc., is called upon. Decisions are made after evaluating all opinions of the various departments. This concept of business partnering is part and parcel of the financial sector of the future.
Soft skills are important. High IQs are nowadays not deemed as important since people with high emotional intelligence are generally better workers. We, as accountants, need to nurture such skills (motivation, inter-personal, empathy, self-revelation, self-development).
Algorithmic trading is leading to thousands of trades happening in seconds. Artificial Intelligence is coming into the ‘repetitive’ job market as well. Blockchain is also an emerging trend; it is a peer-to-peer networking technology and safe since thousands of computers hold the same blockchain record.
A recent study found that the job market for accountants will expand in the future. This is because data analytics will increase and will be used by accountants to advise businesses.
Target markets are shifting, and in these changing dynamics, how a finance controller or business supporter acts is essential to the success of the business.
We are trying to form a new department called the ‘Technology in Tax Department’ in PwC to align ourselves with the changes.
Iftekharul Bhuiyan, Head of Finance – South Asia East, The Nielsen Company (Bangladesh) Ltd.
Finance business partners have to work with business leaders daily. Compliance and independence must be ensured. All of us work for the success of the business, thus business leaders need to receive the required information. Thanks to technology, we can provide information upfront.
Uzma Chowdhury, Director, Pran-RFL Group
The amount of data that our forefathers used to work with has been surpassed by our generation by more than a million times. The finance sector has to deliver information to the user in a manner so that quick decisions can be made based on the available data. We are trying to bring in technological innovations through management information systems (MISs) to come up with real-time information. In the competitive market, this will help businesses advance.
Taking the least amount of time to transform data into real information would give companies the strength to determine which company will win the race. At top management levels, we need to ensure that people below in the chain of command have the information as soon as incidents occur, so that they may take decisions themselves.
Sarwar Azam Khan, Former CFO, GSK
In relation to finance, the changes from traditional accounting to business partnering have been happening since the last 20 years. We have to satisfy both our customers and the bankers.
Partnering with internal and external factors is impacting businesses’ bottom lines and also decision-making at top levels. Investment, human resources and all finance-related matters thus come into the picture, with people in our profession taking part at all levels.
Zulfikar Rahman, Head of Finance & Operations-BD & UK, NewsCred
Over the last 2.5 years, we have had 17 different integrations, with increased incorporation of automation. Expense reports, credit card purchases, receipts, etc., are all automated. We as accountants are now more like project managers or adult coaches who are managing technology, and integrations to make sure that everything is fed into our accounting system. Ultimately, we are business partners who are interpreting everything in the system and forming partnerships.
Thomas Barry, Director of Finance, icddr,b
CFOs or Directors of Finance can be described as coaches since they assist the CEO or the COO (or any other divisional leader) in decision-making. Therefore, they need to be agile coaches.
We need to guide people, since non-accountants do not really understand finance. Part of our job is to make information simple. Even with advancements in technology, we still have data which may have variances and identify trends. We have to interpret that data for organisations.
Part of our job is scenario analysis. We have to make decisions, even with all the data available to us. Technology will not show us preferred routes; it will show us the data and trends, but the ‘agile coach’ has to make the decision.
Some managers still seem to stick to traditional methods, and do not use resources such as AI or even Excel. Maybe only 50 percent of businesses will opt for AI.
Professionals need to be more analytical, develop soft skills, and show good leadership through empathy and understanding.
Md Fuad Uddin Khan, Associate Director – Tax and Regulatory Services, PwC Bangladesh (Pvt) Ltd.
The AI, robotics and technology innovations all exist. However, emotional intelligence is of utmost importance. Data will guide us, but decision-making is done by people analysing such data.
Accountants in third world countries need to be aligned with the pace of the faster world.
The changes in technology mean that real-time processing of data needs to be used by the users of information. There are a lot of users and stakeholders who are waiting for the data. In the end, there is a need for faster decisions.
Zahidul Islam Malita, CFO & Finance Director, Unilever Bangladesh Ltd.
The rate of change in the financial sector is faster than we think. What I learnt three years back is irrelevant today. Thus, re-skill procedures are essential.
Finance resides within business, so changes in business affect finance. Consumers are changing rapidly. People are not content with the same products they enjoyed five years ago. Today, people’s tastes are varied, requiring us to align ourselves with the process of hyper-segmentation. Unless we identify the needs of people, we will not understand the impact it makes on finance. The way consumers shop is also different. Online purchasing will increase.
Around 80 percent of bookkeeping, recording, payments, financial accounting and reporting will be executed by machines in three years’ time. Partnering will thus be critical. A big portion of our operational work is already being done by bots since rule-based work can be easily operated. However, human brains are required to predict the future and come up with business solutions.
Shamim Al Mamun, Senior Vice President & Chief Financial Officer, LankaBangla Finance
LankaBangla Finance is changing their business model, just like many other financial institutions. Previously, product marketing officers would go door-to-door sourcing the files, come to branch offices, and manually input data. Now, we plan to provide tabs designed to allow files to be transferred from ground-levels.
Finance departments are now strategic partners with the CEOs and the Board. I am a chartered accountant, but I had studied computer science. With technology taking over, the role of accountants can be made easier and more business-friendly. LankaBangla Finance has a business finance department whose sole responsibility is to partner with other businesses. They analyse data and take decisions based on those business insights and information. The overall business strategy is thus helped.
We analyse which stores’ customers use their credit cards/debit cards most. Based on such data, credit card divisions can then strategise to provide discounts or incentives in those stores to make customers spend more there.
Mustafa Alim Aolad, Deputy Chief Financial Officer, Grameenphone Ltd.
In Grameenphone, we compare ourselves with other telcos by using net promoter scores from subscribers. In finance, we developed a survey for our internal stakeholders to provide feedback. We established our own internal promoter score to see how much the organisation valued our work as a finance function. About five years ago, our net promoter score was negative. Then, we tried to understand how the financial function could improve. We did external research and found that stakeholders expect excellence and efficiency from the finance function. Excellence refers to driving strategy, driving planning and providing information for decision-making; efficiency refers to shortening turnaround times.
Value addition is vital. During the recent cyclone Bulbul, there were power cuts. This meant that our towers in certain areas had to be shut down. Generators, or back-up batteries, usually can keep such towers on for about eight hours. We then had to analyse based on external reports, where the cyclone would move through. We determined which of our towers would be affected, and whether these towers had adequate back-up. We analysed whether those towers could be shifted from lower revenue-generating sites to higher revenue-generating sites, or to places with higher populations, where more people need to contact friends and family. We had the lowest amount of outage during this particular cyclone because finance, technology and commercial departments all worked in cohesion to figure out solutions for this critical situation.
In Telenor and Grameenphone, over the last two years, it has been mandated for us to allocate at least 40 hours of training in every resource of the company. All of the training is done online and provides certification. This training is targeted towards artificial intelligence, machine-learning, robotics, leadership, and being agile. A huge amount of time has been invested to help people move away from the blue way of thinking which is more bureaucratic and traditional, and move in to the red way of thinking, which is the way start-up businesses think. We also monitor and follow up on the progress of employees who have been let go.
Yamen Jahangeer, Director-Tax and Regulatory Services, PwC Bangladesh (Pvt) Ltd.
In the USA, when they hire a CPA or CFA, they assume that them having a high IQ is a given. The challenge comes with the emotional intelligence component. Even Wall Street firms require accountants to be more human-aware and more emotionally capable of understanding others’ emotions. That is where the transformation is happening from a US perspective.
In Bangladesh, in case of finance professionals or accountants, the focus needs to shift from IQ to emotional connectivity. People in Bangladesh want quick transactions, but there should be a higher focus on external factors. We work like robots, at times following traditional methods which have been around for decades. But, we need to actually analyse real-time data and see what it really means and how it could be applicable to organisations. From the perspective of the financial sector in Bangladesh, this will allow quick advancements.
Maimun Kabir, Assurance Specialist, PwC Bangladesh (Pvt) Ltd.
Along with technology changes, improvement of skills is necessary. Machine learning and business intelligence will aid finance professionals in handling larger volumes of data. We need to embrace the technology in order to truly embrace the future.
Kazi Mujahid Ul Islam, Manager – Accounts and Finance, PwC Bangladesh (Pvt) Ltd.
If we analyse the duties of today’s accountants of Bangladesh, most of them are not even aware of many terms of the accounting system. The regular jobs will become obsolete in the future due to the introduction of automation. AI and machine learning will do the analysis, but the human brain has to make decisions based on it. We need to embrace these technologies and read the AI and ML languages, since only humans understand practical scenarios. This is the only way we can remain in the business.
Shafaat Ali Choyon, Senior Business Development Manager, Employers & Member Affairs, ACCA Bangladesh
Currently, co-ordination of the finance department with other sections of respective companies has become highly essential. Other divisions such as marketing and supply chain are looking to minimise risks through correct predictions, and also by projecting consumer demands and possible challenges in execution during fast-moving changes. Business managers and business-leading teams expect finance divisions to work on this as well. What is needed now is getting the right insights into business-planning models and elements like product launches.
Oliver Gibbs, Regional Financial Controller – MESA (Middle East & South Asia), ACCA
We are a support function and so customer service should be key to what we do, but this is often overlooked. My own business heads want real-time information, interpretation, and issue identification to help them run their business better. Ultimately, they are looking to reallocate their resources in the best possible way.
Advancement in IT has given rise to many new roles such as automation controller, data scientist, and digital finance lead. Digital project implementation is what we all will obtain experience in. The transaction work is becoming completely automated.
In the past, the CEOs were often those in sales or marketing. Increasingly, the CFO has taken over that role. This is due to strategic and commercial mindsets taking over. Our future predictions have improved, and we need to be agile to meet them.
Technology brings risks with it, which gives rise to the issue of internal control. This is becoming increasingly important in finance. In 1995, a rogue trader, Nick Leeson, single-handedly brought down Barings Bank by doing derivatives trading, with an open position. In August 2012, Knight Capital lost USD 440 million in forty-five minutes. The area of derivatives is also in trend nowadays. It will come to Bangladesh eventually.
Mohammad Muslim Chowdhury, Comptroller and Auditor General of Bangladesh (CAG)
The Fourth Industrial Revolution, unlike other revolutions, is highly impactful. Under this revolution, things like artificial intelligence, blockchain, machine learning, internet of things (IoT) are now worlds of their own. Human skills keeping up with the rapid changes are an area of concern.
We have initiated centralised pension offices. Already, around 80,000 pensioners, throughout the country, receive their amounts from the Central Bank Treasury. That sort of change is now possible, which was not the case before.
The six hypotheses provided in the report by PwC and ACCA are all held to be true and need to be applied. In the Fourth Industrial Revolution, separated domain, and concepts like sub-ledger, and ledger are not required anymore. Data is generated instantaneously now, thus ‘ownership’ of it has changed over time. It is now possible for CFOs and COOs to go beyond their own entity channels.
Related syllabuses in educational institutions must be updated. There needs to be focus on things like data analytics, rather than traditional transaction systems.
In the central government system, all transactions are processed on a real-time basis. Generally, the perception is that the government is not adapting to changes, but this is not true. Many transactions, including pensions, are now done through electronic fund-transfer systems. Fund-checking is done electronically.
Also, a centralised general ledger is maintained, though blockchain has not been included as of yet. All transactions, at the upazila level, are captured in the general ledger, almost on a real-time basis. All employees’ data is electronically maintained, including the data of pensioners.
Md Ahsanul Hoque Bashar, Country Manager, ACCA Bangladesh
Change can be handled with forward-thinking, agile leadership. Finance leaders need to embrace the changes in order for the lower levels of management to also follow.
There have been massive changes in the sales process, such as the introduction of enterprise resource planning (ERP). Real-time data entry, invoicing, credit control and pensioning are all changing. The major concern is how we embrace the changes; if our resources are ready for this change, and whether we are capable of handling and have the right attitude to embrace these changes.
To tackle rapid changes, financial literacy is important. Technological changes cannot be introduced all of a sudden, so children need to be educated about this, starting from grade seven.
There needs to be a combination of ‘oldies’ and ‘tech-savvy’ entities, in order to produce the needed results. The experienced parties can become think tanks while freshers can take that expertise into account and blend it with their knowledge.