THE FUTURE OF FINANCE – TECHNOLOGY AT PLAY

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THE FUTURE OF FINANCE – TECHNOLOGY AT PLAY

by Oki Samson

L-R: Deputy Vice Chancellor, Lagos State University Presenting An Award to Mr. Ayoku Liadi, Executive Director, United Bank for Africa PLC at the Lagos State University, Faculty of Management Sciences, Departmental 2019 Annual Public Lecture of the Department of Banking & Finance

been Speech delivered on behalf of Tony O. Elumelu, CON, Chairman, United Bank for Africa Group

and Founder, The Tony Elumelu Foundation by AYOKU LIADI, EXECUTIVE DIRECTOR, UNITED BANK FOR AFRICA (UBA) PLC at the Lagos State University, Faculty of Management Sciences, Departmental 2019 Annual Public Lecture of the Department of Banking & Finance

PROTOCOLS

Good Morning;
The Vice Chancellor, Prof. Olanrewaju Fagbohun (SAN);
Principal Officers
Members of the University Governing Council;
Academic Board
Distinguished staff and students;
Members of the Press;
Ladies and Gentlemen;
I am Ayoku Liadi, Executive Director, United Bank for Africa (UBA) Plc and I am pleased to be here with you all today, representing Mr. Tony Elumelu, CON.
Tony O. Elumelu (CON) is the Founder of the Tony Elumelu Foundation, committed to empowering young African men and women as our Group’s contribution towards the development of our continent.
Tony Elumelu or TOE, as we all call him, once said “The future we all want for ourselves is one of our own making”
He is also Chairman of Transcorp Group, Nigeria’s largest conglomerate with investments in power, hospitality, and oil and gas and Chairman of United Bank for Africa Plc (UBA), United Bank for Africa Plc is a leading pan-African financial services group, with operations in 20 African countries, as well as the United Kingdom, the United States of America and presence in France. United Bank for Africa Plc (UBA), is currently the only African bank with a deposit taking presence in the United States of America.
I am honoured to be here this afternoon and on his behalf, I would like to commend and congratulate the Vice Chancellor, the principal officers, governing council, management, staff and students of this great institution.

L-R: Deputy Vice Chancellor, Lagos State University; Mr. Ayoku Liadi, Executive Director, United Bank for Africa PLC; Prof. Babatunde R. Yusuf, Dean, Faculty of Management Sciences and Dr. Rotimi Oladele, Executive Secretary, Institute of Entrepreneurship, LASU at the Lagos State University, Faculty of Management Sciences, Departmental 2019 Annual Public Lecture of the Department of Banking & Finance

THE FUTURE OF FINANCE: TECHNOLOGY AT PLAY

I usually consider it a great privilege to address young innovative minds, especially in a reputable institution of learning like Lagos State University. The reason is because it is a rare opportunity to address, mould or contribute to “the future.” The future is here and you are the future!

However, I will like you to note certain points that may shape the future of someone here today.

The key to continuous relevance is staying awake and staying disruptive. Therefore, “Stay Awake! Stay Disruptive!!”

What does it mean to stay awake and to stay disruptive?

It means to:

– Always be on the cutting edge of knowledge and emerging innovations in the marketplace.

– Constantly seek better, easier, more effective and perhaps, cheaper ways of doing things. Never, never, accept the status quo.

– Have a learning mindset, one that is ready to embrace changes no matter how “sudden, rude, unexpected or uncomfortable” those changes might be. Remember, the only constant thing in this fast-paced world is CHANGE.

The future you will experience is one of your creation, imagination, vision and exposure.

You may not be able to see the future; but with the right insight, you can prepare for it. This means the future favours only the prepared.

Think “GLOCAL” – have a global outlook towards life, while not neglecting local considerations.

Keeping pace with changing technology is the number one initiative that the finance function must embrace in today’s fast-changing world.

Cross Section of Lagos State University, Faculty of Management Sciences’ Students during the Departmental 2019 Annual Public Lecture of the Department of Banking & Finance at Makanjuola Hall, LASU.

(Highlights of the recent innovations in modern day banking compared to 30 years ago: ATM, Mobile Banking, Cards, USSD, Banking via social media platforms like WhatsApp, Wechat, Facebook, Snapchat, Instagram, Chatbot (.e.g. Leo that was released by UBA Plc in March 2018 and acknowledged by Mark Zuckerberg at the Annual F8 Conference held in San Jose in May 2018).

In discussing the role of technology in moulding the future of finance, I will be drawing insights from global initiatives and trends, while making attempts to localize them. Also, I will like to take cues from the research emerging themes of a recent paper published by the Chartered Global Management Accountant (CGMA^®) and the Association of International Certified Professional Accountants (AICPA) in June 2018.⁽¹⁾

The changing role and mandate of finance.
Changing technology and finance.
The changing shape of the finance function.
Changing competencies and mindsets.
The role of the academia in equipping budding finance professionals for the future.

The changing role and mandate of finance

In the words of David Jones (Senior Managing Director at Robert Half Asia Pacific), “Today, finance is about understanding and checking the hypotheses behind management’s views, and ensuring the goals being pursued are aligned with the company strategy.” ⁽²⁾

Significant pressure is on finance professionals in the face of process automation, the corporate digitisation agenda and an ongoing need to protect assets and manage costs.

As business’ expectations increase, finance functions have gone beyond meeting the traditional operational finance objectives and maintaining the company’s bottom line. There is constant pressure to provide strategic direction to the business to help make better informed decisions. How can the finance function evolve to meet and surpass increasing expectations?

Today’s finance function is a strategic, analytical, data-driven powerhouse that encompasses digitisation and drives performance, thus adding value to business. A combination of an efficient finance model, technologies and highly skilled people is needed to successfully adapt to the finance function of the future.

Changing technology and finance

According to a 2016 Deloitte report into Finance in a digital world⁽³⁾, there are seven technologies that modern finance functions must embrace. These tools were categorized as either ‘core modernisation’ or ‘exponentials’. Core modernisation tools are those that focus specifically on updating financial systems and existing capability, whereas exponential tools focus is on delivering new capabilities to the finance function.⁽⁴⁾

(A) Core modernisation = mainstream

Cloud: The provision of shared computing services over the Internet, whether networks, storage or applications. ‘A cloud is a colony of millions of computers that are braided together seamlessly to act as a single large computer.⁽⁵⁾With cloud solutions, there is no investment in IT architecture or costly updates and maintenance. Examples of companies that have bought into cloud technologies include companies like Uber, AirBnB and Spotify. Uber does not own any taxis and AirBnB does not own any bedrooms. As such, when valuing their assets, the finance professional needs to focus on intangibles that are not recorded on the companies’ balance sheet.
Process robotics: Cost reduction and improved efficiency are the major gains of automating processes and repetitive manual tasks through these technological solutions. Also, finance function can focus on real business value when tasks such as data entry and report generation are automated.

Visualisation: With visualisation, technology is used to turn increasing amounts of raw data into accessible insight for an organisation. Traditional spreadsheet metrics turned into pictures and infographics make important organisational stories easier to understand for non-finance functions. Moreover, these tools help speed up processes when using data and exploring for prototyping and scenario planning.

(B) Exponentials = early adopters

Advanced analytics: Advanced analytic tools can greatly improve the effectiveness of planning and forecasting, leading to deeper business insight and better predictive modelling. Also, with further acquaintance with these tools and the algorithms that underpin them, it will erase the boundaries between the world of the data scientist and the management accountant.

Cognitive computing: This encompasses fields such as artificial intelligence, speech recognition and machine learning. They work together to provide automated insights into the increasing amounts of data finance professionals have access to.

In-memory computing: This involves technical architecture storage solutions, where information sits in dedicated Random Access Memory (RAM) servers. With faster data transfer rates within RAM, the ability to handle and interrogate massive live data sets quickly and more efficiently is enhanced.

Block chain: This is a digital platform that stores records of value transactions through a distributed, peer-to-peer network. The records on a blockchain are immutable, which means the ledger is verifiable and auditable. The bitcoin currency is currently the most popular example of a blockchain in action.

Together, Deloitte’s research suggests the seven technologies are helping organisations in improving performance and making the finance function serve its customers more effectively.

The changing shape of the finance function

The 21st century Finance Officer has graduated from being just one that reports the figures to one that drives performance across departments. Little wonder that Chief Finance Officers of some major corporations are being referred to as “Chief Performance Officers.” Today’s Finance Officers have graduated from being:

How the finance function can drive performance and lead change?

Partnering with the business: This entails spending time with other departments to help them navigate their business challenges.
Communication: Investing time to make other staff members aware of what is happening and why. It involves getting the buy-in of others critical for successful change management.
Analytics: Beyond knowing the numbers, it involves understanding the right information to drive behavioural change, and the ability to clearly communicate the insights throughout the business.
Resources: This entails having the necessary technical and human resources to make staff become agents of change.
Keeping everyone’s eyes on the ultimate/long-term goal: This involves the ability to showcase the benefits and the profits, and make everyone see the bigger/ultimate picture.
Awareness: The 21st century finance professional needs to be aware of the challenges, resistance and obstacles. He or she needs understand them, acknowledge them, and work collaboratively to overcome them.

Changing competencies and mindsets

Today’s finance professionals are taking centre-stage in their business fields through the mastery of necessary technical skills and pragmatic demonstration of high levels of business acumen, leadership and communication skills.⁽⁶⁾This is because the technological impact on finance functions continues to grow.

According to a research⁽¹⁾conducted among 160 CFOs in Australia in June 2018, statistical modelling and data analysis, financial analysis and planning, budgeting, forecasting and operational analysis are key areas of focus for the finance professional ambitious to offer real value to any organisation. Furthermore, Data mining, extraction and faster interpretation of Big Data will be critical skills to hone.

The role of the academia in equipping budding finance professionals for the future.

In building the finance professionals to meet the demands of the finance function of the future, the academia has so much to do.

The academia needs to graduate from imparting traditional technical accounting and finance skills to embracing modern technologies in the delivery of both technical and soft skills needed to build a global finance professional of the future.

I am not certain if the finance and accounting graduates of today are familiar with modern financial software packages, including global accounting and financial reporting standards. Have they been imbued with ready-to-market soft skills like leadership, communication, commercial acumen, flexibility/openness to change and strategic vision?

If not, I will like to propose an overhaul of the curriculum to accommodate these. The academia should go beyond churning out finance and accounting graduates on a yearly basis to building ready-to-market finance professionals thoroughly equipped for modern finance functions.

As finance graduates and professionals, we need to be aware that it is no longer business as usual and with the fast-changing landscape, it will never be business as usual. Traditional knowledge of finance is getting stale in today’s business world and indeed there is dire need for retooling our skills if we must remain relevant n tomorrow’s financial world. Technology is fast replacing the basics of finance. Financial reporting is increasingly being automated, just as data analytics is demystifying performance analysis. Tomorrow’s finance professionals must have capabilities for business intelligence and cognitive analysis. We must apprise ourselves of the most recent technology and continue to retool our skills to remain relevant today and into the future.

While cutting edge research is vital to achieving the above, the key is staying awake and staying disruptive. Therefore, “Stay Awake! Stay Disruptive!!” Never and never accept the status quo.

Thank you for your time and attention.