Advice and Information for Finance Professionals

Disruption is Coming. Are Finance Professionals Ready?

Guest Author

By Jim Kaitz, President & CEO, AFP

I’m seeing a trend on the horizon, and it doesn’t necessarily bode well for treasury and finance. While many practitioners are spread increasingly thin, focused on checking off the next task on the list, disruptive innovation is occurring all around them. Yet they don’t consider these developments and embrace how to use them to move their organizations forward.

Only a select few are recognizing the need to adopt new technologies such as blockchain, artificial intelligence (AI), data analytics and the Internet of Things (IoT). Unfortunately, those who are slow to adopt will find themselves falling behind—and fast.

At no time in our profession has it been more important to stay ahead of the tech curve. But the data suggests that we are slow to adopt technology—and, more worrying, even slower to maximize its full power.

Perhaps more troubling is the idea that we’re not aligned on our tech needs and goals. According to a recent Marsh/RIMS survey, a stunning 52 percent of companies’ risk professionals say they don’t use or even plan to use IoT technology. And yet, according to the same study, a far higher majority of these companies (despite what their risk professionals believe) say they will be using IoT technologies over the next two or more years.

According to the Marsh/RIMS report, this disconnect is mostly due to organizational misalignment. For treasury and finance, this kind of misalignment can be fatal. Without the proper tools—or without the talent to maximize these tools’ full value—treasury and finance will not be able to deliver the strategic value their companies will increasingly demand to stay competitive and turn a profit.

Proceed Quickly—and Wisely

It is more critical than ever to look at technology with a long view—how it will help us not just now, but five years from now. At the same time, we don’t have the luxury of waiting to evaluate technologies such as AI, new computing architectures, and blockchain and distributed ledger. According to the World Economic Forum, we need to proceed with haste, but wisely.  

Smart treasury and finance organizations are teaming with banks and technology companies to determine their future rather than wait for it to be thrust upon them. They see tech—particularly fintech—as a key element in improving the efficiency of the profession and freeing up their time to deliver desperately-needed strategic insight and analysis.

Treasury and finance organizations need to look at the fintech market to understand the efficiencies their offerings provide. They need to figure out quickly which tools offer the most value at the lowest costs and risk. They should seize opportunities to connect with the innovators, disruptors and macro-trend experts who are transforming technology—particularly technology that could have a major impact on treasury and finance. They need to look at the very solutions that drive future profitability, reduce risk and improve operating efficiency.

Form an Action Plan

A smart tech strategy starts by assessing how your company plans to adapt to challenges, opportunities and new market conditions over the near term. Then you’ll need to figure out where tech plays a role, assessing which technologies will have a positive impact on your P&L and can boost your business as a whole.

As you put your tech assessment/strategy together, think about potential hurdles and implementation barriers:

  • Which technologies can deliver the greatest value to your organization?
  • What are the main the challenges to adoption?
  • How is your organization’s culture affecting innovation?
  • What organizational or cultural barriers to technology implementation do you face—both within your organization and among your customers?
  • Does your team have the skills to leverage the advantage of the technology?

There is no question that ever-evolving technology is reverberating loudly within the treasury and finance community, affecting every single job. Change is just a matter of when, where and how it affects corporate treasury and finance, and whether the profession will proactively lead the coming changes, or passively react to the unavoidable technological advancements that are already underway.

It will become increasingly important to identify emerging technologies and applications that will affect treasury and finance—and the future of our work. Once these are identified, we must prepare and educate, with a focus toward concrete action to address pain points, reduce costs, increase throughput and generally improve the efficiency of the profession.

AFP wants you to help shape the technological changes that are coming. AFP MindShift brings together the innovators, disruptors and macro-trend experts that will transform the role that technology plays in corporate finance and treasury by developing solutions that drive future profitability, reduce risk and improve operating efficiency. Watch our recorded webinar to learn more.

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