I left you with the rather tantalising question, “what does the future hold for the treasurer?” in my last blog on the drivers of change in treasury, and I will start to attempt to answer this. But let me first cite the highly-respected Oxford philosopher, Robert Roland Smith, who spoke recently on BBC Radio Four. He said he believed that we are about to start a “New Age”. Over centuries, he said, mankind had moved through different ages- First was the Age of superstition, then Age of religion, reason, then most recently the Age of ideas. He predicted that the next age would be the “Age of intuition”.
This is great for us treasurers. The best of our type have always been intuitive -- lauded for their keen and quick insight to situations as they develop. They are forward looking, always trying to anticipate where the next financial risk or danger is coming from, often forming this view from an incomplete picture, but yet also have the technical skills and experience to put in place practical actions to manage the best business outcomes. You may smile but I’ve always thought of the best of them more as the Formula 1 driver of the finance function, rather than the pit stop crew.
So is it likely that the treasurer’s role could broaden beyond their pure management of financial risk? Yes, there is every possibility. This will be largely determined by the type and nature of business problems which an organisation is trying to solve. These will change extensively over time and treasurers need to anticipate these changes to remain relevant.
Treasurers have strong problem solving skill sets. Their outlook has already been broadening, and has inevitably become more strategic in nature -- partly in response to the recent financial crisis and partly in response to the CFO’s role also becoming broader. In many organisations the CFO’s role is now becoming akin to that of deputy CEO.
So what attributes are CEOs looking for in their CFOs? KPMG recently conducted some research and this is what they listed as the top business attributes:
So, as the CFO steps up to the plate I would expect the treasurer’s responsibilities will broaden and help fill the gap created. Of course, this would largely depend upon an individual treasurer having the correct blend of technical, behavioural and business skills.
Treasurers have always had excellent problem solving skills. These will still be in great demand in the future. For years the CFO has been asking us all to do “more with less”. Part of this requires more automation, better, more informative and timely business dashboards, less clunky and cheaper business processes. The trend is irreversible.
Recent research undertaken by Oxford academics Frey & Osborne looked into how susceptible jobs are to computerisation. This was also referred to by Andy Haldane, the Bank of England’s economist last autumn in his speech to the UK Trade Union’s Congress. In this speech he highlighted the rise of artificial intelligence, robotics and automation and considered what impact this might have on skilled and unskilled occupations. His speech subsequently led to news headlines in papers like The Guardian “Robots threaten 15 million UK jobs”. Perhaps a little emotive, but let’s be realistic; we have to be honest and ask ourselves, what impact will this have upon future employment of treasurers as advanced finance professionals?
Frey and Osborne list more than 700 jobs and, worryingly, finance accounts manager role has a 98% probability risk of automation. I have some great news: the treasurer’s job role is not listed! But many finance roles are, and they have been highlighted as having greatly increased risk of automation.
The research shows that the more senior, skilled and professional you are the lower the probability that your job will be automated. You are 5 times more likely to be made redundant on a job earning less than £30k than £100k or more.
Andy Haldane mused perhaps “the accountant’s sun has truly set”. I think this view is perhaps a little harsh, but if he is proved to be right, how might it impact upon the role of the treasurer?
Fortunately for some, there is less risk of job role automation the more highly skilled and senior you are. A number of futurists have also highlighted what future skills will be in demand. Jobs performing repetitive and routine processes are definitely out. In future society will be demanding 3 key skills:
So if the accountant’s role is going to be under pressure, the treasurer will have to up their game, in every way to retain their status.
When I was starting out in treasury at the end of the 1970s, your ability to get that plum treasury job was more than likely connected to who you knew, more than what you knew. It was perhaps characterised more by style over substance or rather benevolence rather than competence.
The number of business connections or acquaintances that you had then were usually fairly small. Those that you did know, typically thought of you the next time that you were looking for a job. But pause for a moment. What will happen in the future?
Will skills, services and even products be sourced without regard to physical barriers and geography will not matter? How will employers decide what they want? Ultimately they want the best skilled person, (or machine to do the job), at the lowest possible cost, when measured over the life cycle. The advance of technology will give employers many more choices.
In the future, employers will be using the best tools at their disposal to select the right individuals (organic or inorganic matter) for their treasury “teams”, which will be physical or virtual. I believe that with advances in technology, business tools will develop further which help better demonstrate an individual’s suitability for their treasury role. I believe that further technological development in the areas of social media, distributed ledgers, gamification/simulation and tokenisation will come together. Could gamification applications become the digital skill challenge equivalent for the treasury professional to show their expertise? I am convinced that over time, development in these areas will enhance or replace traditional recruitment or buying methods to make it far easier to answer, with confidence, the usual hiring questions, quickly at a reasonable cost:
Correspondingly these technological advances will also empower the treasury professional. Already over a career, it is becoming more usual for all of us to have many more jobs in our careers than our parents, through necessity or by choice. In the future, the treasury experts in demand, may be providing their expertise and services as part of a TaaS (or Eaas) - Treasury as a service or Expert as a service. They will want to know where the most interesting business challenges are and how they may apply their skills- and get remunerated in return. Currently these are typically managed through long term employment contracts, or indirectly via a consulting firm- which of course could be one of the Big 4. I believe in the future these models will change. The treasurer of tomorrow will increasingly take direct control over their career and build their unique services shop window which demonstrates to buyers how they can add value to their businesses.
Why do I think it will happen? Because it already is happening in other disciplines, and in other walks of life. A generation ago we were all glued to the television in awe. How could the medical profession respond to the dire emergency in the Australian outback? The answer was of course the “flying doctor” talking to Skippy over a CB radio on how to get help. Leap forward a generation and we are now comfortable for an expert surgeon to undertake an operation on a patient, remotely, perhaps even from the other side of the world.
So why shouldn’t the skills of treasurers become similarly transportable? The next generation is already globally socially connected. We’ve also already got used to offshoring and outsourcing of services. Incidentally, I love the news story of the US IT employee who completely outsourced his job to China? He evidently spent 1/5th of his salary paying a Chinese firm to do his job for him whilst he spent the rest of the day “working” at home watching cat movies. His employers described him as talented, and only spotted the fraud through a review of VPN security protocols.
