The future FD: What you need to know

Blockchain, machine learning, data visualisation – what does the future look like for a rising Financial Director?

Liverpool, 2025. Jane, the finance director of a fast-growing SMB bio-pharma company, is commuting to her office in her self-driving car. She’s updated on the latest financials via an alert on her wearable mobile device and makes a voice-activated query, for instant “visualisation” of her company’s trading and balance sheet positions.

Some of the technologies in this scenario, mentioned in a report by accounting firm Deloitte, may sound a bit too sci-fi − particularly for those businesses that sill rely on spreadsheets for many tasks.

However, the role of finance directors and finance departments has changed a lot in the last 20 – even 10 – years. FDs and their colleagues in the finance department are much more than transactional guardians of a company’s finances. They’re spending more time on company strategy and analysing data to predict risks and opportunities, using technologies such as cloud computing, big data, analytics and, most recently, machine learning/artificial intelligence.

As the roles of FD and finance staff become broader and more demanding, which skills do they need to advance their career and keep them motivated? What training should they get?

Skill #1: Tech skills

IT skills will become as important on an FD’s CV as their ability to understand a balance sheet and manage cashflow. Technologies including blockchain, (a de-centralised, digital ledger that keeps a permanent record of a transaction), artificial intelligence (which mimics human thinking), robotics (automating business tasks) and analytics (the ability to analyse large amounts of data in near real time) are expected to have a big effect on business, including finance departments.

Blockchain, which underpins bitcoin and other cryptocurrencies, could enable complex financial transactions to be completed automatically. That would give FDs more time to spend on strategy and analysis of their market.

Skill #2: Multi-tasking

The FD role will be more varied; probably the most varied of any boardroom role. The global financial crisis of 2008 re-emphasised the importance of the FD’s role, particularly as an early warning for serious financial problems.

In the next 10 to 20 years, FDs will be responsible for, or closely involved in, digitising their business and encouraging innovation (“chief automation officers” and “chief innovation officers” will become more common). They’ll spend less time explaining the past − for example, summarising the financial performance of a company in annual results – and more time on business projection.

“Balancing these roles makes a CFO’s job more complex than ever: no longer focused on processing lagging data and instead leveraging leading analytics to make decisions that make an impact,” says Deloitte in its report.

Skill #3: Strategic adviser     

Cashflow and other routine tasks in finance departments, will increasingly be automated. This will allow FDs to spend more time on more interesting tasks, such as working with other business heads and departments on strategy. And by analysing financial data, including expenses, purchases and invoices, in near real time, FDs and finance staff will help departments stay within budgets and increase efficiency.

“Currently cashflow is a major reporting and management issue but this will become less so as technology can predict and report this better,” says Roland Seddon, director, at recruiter MRK Associates, a recruitment company that specialises in finance, data analytics and office support jobs. “CFOs will [therefore] be spending their time on strategic business partnering and allowing the business to make more real-time decisions.”

Skill #4: “soft skills” for tough times

Technology will, perhaps ironically, make non-technical skills even more valuable. FDs will increasingly act as corporate translators and communicators: finding connections between data and explaining the financial and commercial implications for the rest of the business.

This will require impeccable “soft” skills – inter-personal skills such as the ability to communicate well with other people and to work in a team.

How can FDs get these skills and experience? Large companies will typically have large budgets for training. FDs at small and medium-sized companies may have less time and money for training but they can keep their tech skills up-to-date by going to conferences and networking events. They can also use social media, such as LinkedIn, to swap tips and contacts, and develop their career. Video is an increasingly important and quick way to get up to speed, as this article in AccountingWeb explores.

The FD’s role is now going through its biggest change for two or three decades. Technology is starting to automate many of the FD’s traditional tasks.

Financial knowledge and accounting skills will still be important, but the long-term trend is for FDs to have a broader role. They’ll focus more on shaping company strategy and predicting risks and opportunities, and less on explaining how their company has performed in the past year.

It’s often assumed that an FDs ultimate career aim is to become chief executive. But in the not-so-distant future, revolutionary technology and a more varied job, may mean that FDs have the most rewarding and challenging job in the boardroom.