John B. Mahaffie, Leading Futurists LLC // August 2017
The future for financial professionals is uncertain. No profession is promised a successful future anymore. Each has to face change, prepared. That means confronting the challenges head-on and uncovering, or making, great opportunities.
With fast-paced change, it means taking action, starting now, to respond and continue to thrive. Charting a new course requires an understanding of the future landscape and a focus on re-envisioning the profession.
The scary news: The center drops out
The automation of work based on artificial intelligence (AI) will cut the center out of the financial professions. AI is already at work in decisionmaking, reasoning and judgment, pattern recognition, and calculation. Software has taken up the work of lawyers, sportswriters, planners, translators, teachers, stock traders, logisticians, biologists, and analysts of all kinds.
While AI raises productivity for professionals, it also eliminates jobs, especially those in middle levels of skill. That will intensify. Shorthand for what we expect is: “the center drops out”.
These changes drive to the core of the financial professions. Automation reduces the need for moderately-skilled financial work in routine analysis, accounting, transactional tasks, bookkeeping, and auditing. It leaves work at the low-skill end such as supplemental data entry, data cleansing, and report generation.
Losing the center—the routine transactional work—doesn’t have to be a bad outcome. These changes put a premium on the most valuable work, involving greater creativity, design, strategy, and human interaction. And that is the most desirable work. The financial professional’s status rises as a valued partner and colleague to the operations and strategy of the enterprise.
How many financial professional jobs will be lost in the next decade is unknown today. That most of those jobs will have to change is not.
The good news: The transformation of commerce
Driven by digital technology and business innovation, we are entering a new economy that will be transformed from the one we know today. This transformation is changing the scale, location, parameters and structure of enterprises. This creates new challenges for business and new opportunities for financial professionals.
We are seeing the fast emergence of:
- Micro and pop-up enterprises
- Freelance work and “portfolio” careers
- New enterprise establishment and dissolution
- A “gig” economy
- Digitally-mediated enterprises such as AirBnB, Uber, Instacart
- Social enterprises structured as companies, but behaving like non-profits
- Crowdsourcing information and funding (e.g. Kickstarter)
- Blockchain, changing how we track, account, and secure transactions
- Bitcoin and other digital currencies
- The ability to collect, manage, and use Big Data effectively
Each of these creates new needs for the financial professions. Filling those needs will be critical.
The financial professions must seize the initiative and define their roles and purposes in the new economy. The push into e-commerce, to harnessing big data and addressing niche needs of consumers, new micro enterprises, digital transactions, and faster turnover in business all shape an opportunity zone for financial professionals. New ways of doing business require new ways of managing business finance, analysis, and transactions.
Are financial professionals ready for the changes? It is not clear. The emerging future financial jobs may not fit the skills of the financial professionals at work today.
What’s in the way of positive change?
Like medieval guilds, accounting and other financial fields joined forces to define and protect their professional turf. In this rapidly changing business and professional landscape, it is not enough to merely defend a turf that other people, systems, and technologies are seeking to disrupt and grab control of.
Financial women professionals and the future
Women can and should be the shapers of the future of their financial professions. If they are not, they face the risk that others will define it for them. Legacy systems may stand in their way. But forging change also means changing one’s own mind. Start by reframing your own mindset about what can and should be.
A deeper look into what is shaping the future can drive and inform the fresh thinking that will be needed, and may help us answer the question, are the financial professions and their practitioners ready for their future?