Future of finance: A beyond-the-numbers focus on people, process

The themes of sessions at the Future of Finance Summit, which concluded earlier this month in Austin, Texas, were global in nature: talent development, transformation of the finance function, and managing amidst uncertainty. There was, however, one comment from a speaker that stood out to Andrew Harding, FCMA, CGMA, chief executive–Management Accounting at AICPA & CIMA, together as the Association of International Certified Professional Accountants.

The comment was about numbers, yet as Harding pointed out, the Future of Finance Summit had no sessions about numbers.

Hear his takeaways from the event, along with those of Barry Melancon, CPA, CGMA, the CEO of AICPA & CIMA, in this episode of the FM magazine podcast.

What you'll learn from this episode:

• How the tools available to finance leaders can help in managing uncertainty.
• An explanation of plans for similar Future of Finance events around the world.
• Why the message of "you're not alone" resonated with Harding.
• One reason Melancon said that older generations shouldn't worry about Generation Z taking on leadership roles.

Play the episode below or read the edited transcript:

— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.

Neil Amato: Welcome to the FM magazine podcast. This is Neil Amato and I'm recording from the Future of Finance Summit in Austin in the state of Texas. I'm joined by colleague Andrew Harding, chief executive–Management Accounting, AICPA & CIMA. Andrew has made the trip over for the event and happy to have him on the podcast to talk about some of the key takeaways and some of the messages he's heard. Andrew, first, thank you for being on the podcast.

Andrew Harding: Hi Neil. Thank you for inviting me. It's great pleasure to be with you.

Amato: I want to get you to respond to one part that I heard in the keynote session, Pascal Finette and Jeffrey Rogers. Their session was about leading into the unknown. They said that uncertainty is not going to end but we can change how we relate to uncertainty and that notion of how can finance professionals work with uncertainty instead of so much as worrying about it.

Harding: They made some really good points, and in particular, they were able to clearly illustrate how uncertainty has effectively grown exponentially since 1990, really to where we are today. It's something that's with us. It's something that we can't get away from and we have to admit to that, acknowledge that, lean into it. But going on beyond that, we have tools that can help us deal with it. When we look at things like data analytics, the vast arrays of data that we're able to analyse, play with, that does start to enable us to predict futures, predict future behaviors of individuals. It can help us predict events like the COVID crisis, like the war in Ukraine.

Those are always going to be the uncertainties which are thrown at us. But there is an awful lot more that we can start to understand and build some predictability into our models in a way which we couldn't do 10 years ago. We certainly couldn't do 20 years ago. When they had their low amount of uncertainty in 1990, there was no chance of doing it. In many ways, we have some tools to help us.

Amato: This is mainly a US event. The people here are mainly from the United States. But would you say the issues you're hearing are universal?

Harding: I think there's an awful lot of resonance around the topics that matter to people. There are nuances according to what part of the world you're in, but broadly similar issues. Finance, it's something that affects all of us in many ways. Business is global. Globalisation might be retrenching a little bit, but we'll deal with the same issues. We all have very similar problems.

Amato: Are there some messages that stick with you in particular? We've talked about Pascal Finette's and Jeffrey Rogers's session, but there were other sessions that you attended. What are some things that maybe stood out to you as takeaways?

Harding: There was so much that the content was really rich. One of the speakers said, "You guys are about finance and numbers." Really interesting. There wasn't a single session which talked about numbers or dollars for that matter. It was all around how we make our businesses better, how we make our finance functions better and so much was about our people, about our processes, and how we evolve those, how we keep in that state of really constant transformation; a number of things. We went from what I'd call relatively soft behavioural stuff to quite rigorous stuff around how you lead and develop a finance transformation project.

Amato: What do you think these finance leaders can take back to their teams? You mentioned the content is really rich and it was, are there some messages you see that can immediately be applied?

Harding: I think the first message for all of them and it's really one of the reasons why people attend these conferences, you're not alone. The issues you're facing, everybody else's facing. If you're going through finance transformation, everybody else is going through it. But what the delegates from this conference have been able to do is to share some of those ideas, share some of those experiences, and they're able to go back and implement things than they would have done before and with more confidence than they would have done before.

Amato: You mentioned it is a shared thing and I guess there are companion events around the world that are, this is not just a US focus. There are Future of Finance events elsewhere; I guess those are upcoming.

Harding: Well, in actual facts, I think today we've got one in China, which I'm speaking at. Although because of COVID and all the immigration restrictions for China, it was pre-recorded. We've been doing that conference in China probably for 12-13 years now, so it's a regular event. Very different in style to the US one, but again, similar topics, similar issues, just different in style.

Amato: What's next for the Future of Finance? Where are you going to take it?

Harding: We want to make this thing global. This has very much been something we wanted to do in the US to support CGMA, to bring the business finance community together. It's been a great success. We've had people over here this week from London. We want to do something similar next year for the UK and Ireland. We may do something again in Central and Eastern Europe, maybe with a different feel for it, maybe for those big GBS [global business services] and shared services centres out there.

But again, bringing together those communities to share ideas, to give a common experience to. One of the features about this is, yes, this conference was under our banner, but the content, the agenda was developed by the delegates. It is very much that finance community, which is really driving this. For me, having it driven by our members to meet their needs is really what AICPA and CIMA is all about. Things that are relevant, useful, and really add value.

Amato: There definitely is some relevance. You hear it and you see it and the fact that it can go to other parts of the world is a great thing. Andrew, thank you very much.

Harding: Thank you. It's been a pleasure.

Amato: Joining me now on the podcast is Barry Melancon, the CEO of AICPA & CIMA. Barry, you've been at the Future of Finance Summit here in Austin. We're wrapping up on Friday of the event. First, thanks for being on the podcast, and second, tell me some of the themes you're hearing, some of the messages that you'll take away from this event.

Barry Melancon: Well, one of the first things is the incredible talent that was in the room from all of these different major companies and people in significant leadership positions coming together to talk about the future of finance. I think that's a very important element. Just no matter where you are in the profession, whether you're in a small firm or a company, a big company, a small company, a big firm, everything we do in the profession is going through significant evolution or the watchword transformation. One of the most significant things was how much that is happening in the finance.

We talk about the future of finance and the evolution of finance, and it needs to change and evolve at every level. These were really very significant leaders in corporate America that really talk pretty openly about how they were transforming finance, what they thought, where they thought it was going, and frankly also how difficult it is and how many challenges they have. The Future Finance of Summit is really a setup of how do we really stay on top of all of that, and then take that learning and that wisdom that is collectively gathered and offer it or spread it to as many of our members who are tasked with that or might be in the future tasked with that in whatever size organisation they're in.

Amato: Is there anything in particular that stood out to you in the session with the young professionals?

Melancon: Human capital is an element that is top of their list. In the US, there's just a lot less people going to college, not just in accounting, but we have more than a million less students in four-year universities, we have about 22% less people in community colleges and so that's not all accounting majors, that's all majors. But what was interesting with the young people who spoke to that — these were young professionals. There was some difference of opinion. I think we tend to batch Generation Z and say there's a monolith of perspective.

One was clearly focused on, this profession is great because it's going to give me a 40-year runway. That's not the stereotypical answer we talk about with Generation Z. He actually admitted, I'm probably going to be a little different than some of my peers. The other two talked about how important hybrid work was. How they're doing something that is fun and has purpose in what they're doing is very important, and I think that is more of what's the common discussion about Generation Z.

The other thing though, all three of them were — every one of us who has been in the profession for a long time, we could be incredibly proud of them. I mean, they were extremely dedicated, passionate, articulate, very thoughtful. Sometimes as this happens with all generations, we think of a certain way of the generation that is following and it's not like my generation, whatever my generation is, and that leaves it to be maybe more worrisome. I really don't think we have a whole lot to worry about from that standpoint. But there are different attitudes there, and there are things we need to adjust to as a profession.

Amato: We're about to be in 2023. What do you see is two top issues facing the profession in that year going forward?

Melancon: Well, it's hard to narrow it down to two, Neil. But the reality is that human capital will continue to be a big issue. It's not just a US issue, it's an around-the-world issue. There are just very few countries in the world that have a big population of young people, a total population that's a high percentage of young people, however you want to look at it. The competition for the minds of very bright new generation is very tight. Also generally they're expecting a profession that will be highly agile, and our profession needs to be committed to that.

In one bucket, it's the human capital element, and the other bucket is all of the major projects that we have are about transformation of the profession. How to rethink about the audit. How to rethink about assurance services in general. How to rethink about client advisory services or CAS and small firm activities. How to rethink about what's the change that's going to happen from a tax perspective. I could go on and on and on. But the reality is all of those things cobbled together are about how a profession transforms in a world that is highly driven by digitisation, that is changing dramatically how data flows and data analytics will flow from that. It's different mindsets of human capital.

But what is also most important about that is we must be a profession dedicated to trust. Because the reality is we live in a society that doesn't have a lot of trust in anything, and yet we are a very trusted profession. That's a huge advantage for our profession. It's what society at large wants and needs, and so we're well-positioned from that standpoint.

Amato: Barry, I think that's an excellent summary. Thank you very much.

Melancon: Thank you, Neil. Good being with you.