Technology has made sweeping changes in all aspects related to financial management. Dr Rajani Gupte lists trends that will rule the industry
One functional area that is sought after by several MBA students is Financial Management. In the recent past technology has made sweeping changes in all aspects related to managing money and financial management. Here are a few emerging trends in Financial Management, which can’t be ignored — and B School must focus and impart knowledge in these areas in order to create an efficient workforce which is future ready.
Fintech: Today the influence of digital technologies on finance is palpable and digital banks, wallets, blockchain tech, and more are becoming a reality. Digital finance is the term used to describe the impact of new technologies on the financial services industry. It includes a variety of products, applications, processes and business models that have transformed the traditional way of providing banking and financial services. To remain relevant in the future understanding all aspects of fintech and knowing how it is altering the landscape of financial services can help in creating an efficient workforce.
Financial Analytics: Financial analytics helps in shaping up business goals. Any organisation can improve the decision-making strategies of business by getting deeper insight about the financial status of its business and improve the profitability, cash flow and value of its business. Data Science and Financial analytics is being used in many financial institutions including insurance companies, banks to understand the consumer to reduce losses by eliminating below zero customers, to increase cross-sale and to measure the lifetime value of a customer. Financial analytics is an important area which must be studied by tomorrow’s force which can deal with financial management.
Artificial Intelligence in Finance: Artificial Intelligence (AI) is a powerful tool that is already widely deployed in financial services. It has great potential for positive impact if companies deploy it with sufficient diligence and care. AI is being implemented by banks to assess risks, detect and prevent payments fraud, improve processes for anti-money laundering (AML) and perform know-your-customer (KYC) regulatory checks. Artificial intelligence is leading the front of the digital transformation strategy in finance today and its role is going to grow bigger in the future. Adept proficiency in AI is mandatory for an efficient workforce of tomorrow.
Financial Fraud Detection: Modern financial institutions face the growing threat of fraud in its different and ever-changing ways. Fraud detection is a set of activities undertaken to prevent money or property from being obtained through false pretences. Fraud detection is applied to many industries such as banking or insurance. Data mining is used to classify, cluster, and segment the data and it helps in automatically finding associations and rules in the data that may signify interesting patterns, including those related to fraud. Experts use such intelligence systems to encode expertise for detecting fraud in the form of rules. This area is gaining importance and is an emerging trend in the study of finance management for creating an efficient workforce.
Machine Learning in Financial Management: Today machine learning algorithms are used to automate trading activities and provide financial advisory services to investors. Machine learning can analyse millions of data sets within a short time to improve the outcomes without being explicitly programmed. Supervised learning, Un-supervised learning, Semi-supervised learning, and Reinforcement learning is an emerging trend in the study of finance management and the future workforce can be efficient if they develop expertise in this domain.
Blockchain-based modes of transactions and financial services: A financial system underpinned by blockchain offers many opportunities for the accountancy profession in the near future. Blockchain technology is a decentralised, distributed, and public ledger that is used to record transactions across many computers within a network.
In the finance industry, this underlying technology allows the transfer of currency with confidence that the transaction is secure and reliable. Block chain is for sure an emerging trend in the study of financial management and will have a tangible impact across several financial services. The future workforce must certainly be proficient and develop expertise in this domain.
The writer is Vice Chancellor — Symbiosis International University