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The Future of Finance: 8 key drivers of change in Asia-Pacific
Few disciplines will likely see as much change in the next few years as Finance. As technology renders some traditional functions redundant, existing roles in the discipline are evolving rapidly from a traditional reporting focus, towards teams embracing their new business advisory potential. And as the abundance of data is addressed across the fast growing region, enormous opportunities for Finance professionals are being created. As Janine Donelly, Performance and Improvement Partner at EY Australia notes, the rate of change in Finance makes successful hiring ever more critical: “Finding tomorrow’s talent is going to be about really understanding technology, data and people skills.”
8 key drivers of change in Finance
1. Traditional Finance becomes machine-based
The Finance sector is actively embracing new technologies, with many businesses reviewing their enterprise resource planning (ERP) systems, utilising software as a service for clients; and implementing robotic process automation (RPA). “We’re moving away from a back office enabling and reporting function – the transactional, accounting and a lot of the controller work will be automated even further over the years,” explains Peter Fahey, Chief Financial Officer at AstraZeneca. RPA is among the numerous technologies where nearly all sizeable organisations either currently have a program in place or are developing one, this will automate a lot of the basic accounting and transactional-type work versus the labour arbitration or offshoring that was happening in the past,” says Fahey.
Automation in turn creates the need for the human-driven Finance teams to repurpose themselves as a compass for the business. “We need to be taking on an advisory role, where we support the strategy and really steer business initiatives,” says Fahey. Finance Director Eugene Low of Experian sees Finance’s future lying with embracing the huge opportunity presented by data. “Finance previously has been transactional and very process orientated. But there are a lot of insights in the data to be unlocked,” he notes. “So that’s where this new hybrid of individuals comes in: those people who have a statistical mind but also the Financial understanding – that’s the sweet spot.”
Without the jobs filled during the traditional foundation levels of a Finance team, the discipline needs to confront how its future leaders will be created – while in the meantime watching its existing CFOs become more sought-after. “The hardcore foundation 101 Finance is increasingly no longer needed now,” says Low. Its removal threatens a valuable training floor for future leaders: “I worry that the new fresh graduates who won't have that training are not going to have the requisite skills,” he notes. “You've got to be in the trenches, especially in Finance,” he says. “Whereas conversely, those with the old-school experience are more desirable now.”
The focus on better data for an efficient and well-controlled Finance function underlines what this means for business fundamentals – a renewed focus on key drivers and value metrics driving the business. This in turn creates the means to support business success. “It’s about how data is integrated and how people are making connections across data,” says EY’s Donelly. “Business fundamentals, the processes of data and technology, and the levers required to meet their strategy – this is how Finance professionals of the future will be the key part of an organisation’s decision-making,” she explains. “Which forces people to think through the fact that you’ve got to move your enablers – technology, data and people – closer together.”
Amidst the structural changes, the difficulty of grappling with the day to day issues of today’s regulatory and control environment continues to be a huge theme for Finance teams across the region. Amidst tighter stakeholder scrutiny comes greater regulatory demand for information from Finance teams and other sides of the business: “Regulators are getting very strict in relation to requirements,” Graeme McKenzie, Oceania Financial Services Managing Partner at EY warns. “There’s going to be more focus on the interpretation of the data.” He notes that courses are now specifically geared to bolstering this insights component, blending technology and actuarial skills: “We are seeing these people come out of university. The challenge, of course, is ensuring they are business-savvy and technically strong,” he notes. “It could mean that it’s a matter of re-training people currently in Finance roles.”
For big companies in particular, quarterly reporting is paramount. Yet for Finance leaders, this can potentially create issues around removing a prudent longer-term focus. “The world is almost moving to a ‘live and die by the quarter’ scenario,” says Low of Experian. “That brings about other complexities. You have to be accurate for the quarter and not miss your quarter: but it may steer you away a bit from the long-term focus too. The CFO has to balance that out,” he notes. “Is a stronger quarter at the expense of a long-term strategy?” This is the risk-reward cycle for financial leaders, he notes. “Given CFOs at a global-level are compensated on the quarter, when do you make the call to invest in the long-game? It can be hard.”
In Asia-Pacific, another driver of change has been the rapid growth of ultra-high growth service businesses, such as Grab, GoJek or Alipay. These present their associated Finance teams with distinct challenges along the way. “These new businesses are becoming very large, very quickly,” says Alan Hyslop, Corporate Finance Director at Global Petro Storage. “It’s an interesting trend and it effects people operating in the Finance industry,” he notes. “The huge finance challenge to support the growth of businesses like these, will be relevant for many careers.” Equally, such rapid growth demands a strong financial backbone: “You need exceptionally bright and dynamic people,” he notes. “The CFOs can’t have eyes and ears for everything, so they need to be surrounded by people who are savvy enough to spot issues and opportunities as they’re arriving.”
In Asia-Pacific, a lot of companies have moved or are transitioning to a low-cost regional service centre model, which requires the close attention of Finance teams. “Having a controller that’s running nine countries out of Malaysia for instance, is seen as the ideal solution,” says Low of Experian. He warns that this can be a lot to place on single teams, especially given the complexities. “Around APAC there can be some capability gaps, so you’re always balancing that risk of someone in the shared service not being close enough to the market, and being charged tax penalties for instance.” The risk of global HQ decisions lumping Asia into one market deserves vigilance, he suggests. “For APAC, the trend will always continue: but it can make it harder for a Finance person in one of the mature markets to progress.”
Massive thanks to those who made Future of Finance happen: in particular those who’ve provided finance insights: Peter Fahey, Chief Financial Officer, AstraZeneca | Janine Donelly, Performance and Improvement Partner, EY Australia | Graeme McKenzie, Oceania Financial Services Managing Partner, EY | Eugene Low, Finance Director, Southeast Asia, Experian | Alan Hyslop, Corporate Finance Director, Global Petro Storage | Jeffrey Ng, Regional Director at Michael Page Singapore | Larysa Melnychuk, CEO and Founder, International FP&A Board. Plus our huge thanks to PageGroup’s Finance discipline leadership team throughout Asia-Pacific.