Are Blockchain and Fintech a Tsunami for Treasury and Finance?
Most treasury and finance professionals know that big technological changes are coming to their field. But do the changes foreshadow a tsunami?
That was the big question attendees of the inaugural AFP MindShift Summit grappled with recently. The first of a planned four-yearly meeting, AFP MindShift participants met for one day to discuss the coming technological changes—blockchain, artificial intelligence, machine learning, and more. As they talked it became clear that the question of whether a technological tsunami was imminent was most important.
Jean Furter, vice president and treasurer of Brocade Communciations, told fellow MindShift attendees that the coming changes reminded him of his old days as a young treasury professional meeting with bankers. “Back then, meeting bankers was very important to get information about the business,” he said. “We’re not meeting bankers anymore. Why? Because I get that information every morning from the web. With blockchain, etc., I can imagine that banks won’t be around. I don’t know whether it’s going to happen, but I have seen sweeping changes.”
Furter said he believes “lower level” treasury and finance jobs will go away. “I bet with AI it will be better for financial planning,” he said. “Middle management will be wiped out. Even my job is at risk—what I’m doing is based on my experience. As soon as I have a system that does it for me and faster, I’ll be redundant.
Even if a fintech tsunami does occur, attendees were unclear how to best prepare. “We hear false positives all the time. But where do we focus,” asked attendee Paul Simons of BNY Mellon. “We know tsunamis are coming, but we can’t afford to cover for all of them. We need to cover where they are most likely to occur.”
Leslie Chacko, principal, Oliver Wyman and Director of Marsh & McLennan Companies’ Global Risk Center, “Maybe we’re not talking about a tsunami. Maybe it’s a number of incremental waves.” Chacko reasoned that the size and impact of waves will be dependent on the level of disruption and each company’s respective level of preparedness. “For companies that are ahead of the curve and have made investments in understanding and applying emerging technology, this won’t seem like a tsunami,” he said. “For others, it will because they aren’t as well prepared.”
In addition to discussing the potential impact of fintech, attendees explored how to develop a roadmap to understand the value of applying tech to organizations; how to best communicate the ideas emanating from MindShift; and non-transactional finance processes to automate.
The San Francisco location for the MindShift Summit meant a cross-country trip for attendee Irena Barisic, FP&A, vice president, chief financial officer and treasurer of The Brookings Institution in Washington, DC. Even so, Barisic felt the event was well worth her time. “I have spent some time now thinking about how to integrate new technology with our current operations and have started these discussions with my colleagues,” she said. “Therefore, the outreach for participation in the MindShift event was quite timely. I decided to attend because I wanted to learn directly from sector experts about the latest and future trends in technology and ask some probing questions about the applicability and practicality of some of that technology. Attending the event also provided me with an opportunity to discuss with my peers their perspectives and concerns about their operations, as well as to hear about their plans for managing new technology impact.”
And even though Barisic’s company is a think tank, she decided it was too important an opportunity to pass up. “We would likely be less impacted than a bank-like business,” she said. “That said, however, most businesses have some kind of a financial structure as it relates to people and software, and new technology will have an impact in some way. In the immediate term, this may mean having to invest additional resources to bring our operations in line with the latest trends so that we can be more streamlined, manage risk more effectively and provide enhanced service to the entire business. Longer term and more broadly, new technology could bring about resource redeployment and a business model change as automation potentially translates to job redesign and staff reduction.”
Already Barisic has re-aligned her staff structure to allow “as much fluidity in the scopes of work as possible within the parameters of our current business model. Additionally, we have begun introducing new skill sets to the team to begin to develop each member in a new area of expertise with the end goal of making the team more agile and ready for change.”
AFP MindShift is hosted by the Association for Financial Professionals, Starfish Leadership and Oliver Wyman.
AFP MindShift was facilitated by Jim Kaitz, president and CEO of AFP, best-selling author Ori Brafman, Chip Colbert, CEO of Starfish Leadership, and Leslie Chacko. PNC and BNY Mellon are also Founding Members of AFP MindShift.