Emerging trends in Finance Management Education

B-schools teach financial management to the management graduates and that includes aspects related to strategic planning, organising, directing, and controlling of financial undertakings in an organisation. Management graduates also learn about applying principles of management to financial aspects in an enterprise and learn key aspects related to critical financial decisions. Aspects related to capital budgeting, capital structure and working capital management are some fundamental aspects that are taught.

Graduates who join the workforce in the finance domain give critical inputs to the organisation in the investment decisions, financing decision and also dividend policy decision. In large organisations, one of the prime roles of a financial management team is to ensure wealth maximization of shareholders i.e. ensure that shareholders earn maximum wealth for the investment made by them.

Effective financial management is of paramount importance for any business (large or small) to survive and grow. It involves planning, organising, controlling and monitoring the financial resources, which can help in achieving the business objectives of the organisation.

here are a few emerging trends in finance management and these have to be learnt by management graduates which can help them in being relevant and also be an efficient workforce of tomorrow.

1. Digital transformation

Financial management as an area is witnessing a colossal and continuous focus on digitization and the adoption of new and emerging technologies to bring in operational efficiencies, enhance superior customer experiences.

Artificial Intelligence, Big Data Analytics, Machine learning application to finance is transforming the financial management domain. There are tools, technologies and platforms which are specifically focused towards financial management and having hands-on knowledge will be of immense value to the next generation workforce.

McKinsey has identified four digital technologies that are re-shaping the finance management which are: Automation and robotics, which helps in improving processes; Data visualization, which gives end users real-time easy to understand financial information; basic analytics, which helps in efficient decision support; and advanced analytics, which can help business to uncover hidden shareholder value and growth opportunities.

2. Digital finance and digital money

The next trend in financial management is Digital finance and Digital Money (DFDM). DFDM encompasses a plethora of new financial products, financial businesses, finance related software, and new forms of customer communication and interaction all of this delivered by FinTech companies and innovative financial service providers.

Today, many banks or traditional insurance companies are facing competition from ‘FinTech’ companies, as new products and services are being floated by them almost every month.

The next generation workforce who focus on financial management must learn the new ways to reach and engage with technologically savvy clientele and have sound knowledge about DFDM.

3. Cryptocurrency – the next big thing

Knowledge about cryptocurrency — a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend is also mandatory for the workforce of the future.

Having knowledge about cryptocurrencies which are decentralized networks based on blockchain technology and have a distributed ledger enforced by a disparate network of computers — is expected in the next generation workforce who will enter the financial management domain.

4. Focus on user experience

Humancentric design has gained paramount importance in recent times. Banks are now aware that it’s not enough to create usable interfaces for banking service delivery but the experience given to customers at every touch point of digital interaction is important.

These trends are re-building the financial services industry. By building out personalized experiences for customers, banks and other financial industry brands will stand to grow their market share and build retention through a loyal customer base.

Hence, all aspects related to enhancing user experience is also “necessary” for an individual who would get into the financial management area.

5. New risks and challenges

Finance management professionals will face an expansive new set of risks that come with technology, the most serious of which are perhaps external security risks. Hence, they must be aware and must constantly update themselves about the risks and challenges thrown by ‘Fintech’ implementations.

With technology playing a major role in financial management, new risks and challenges is also a trend today. New regulations to face and mitigate the risks are dynamically created by regulatory bodies.

New legal regulations brought by Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) and others have to be studied and the finance management professionals have to be updated and must also adapt to a variety of new regulations throughout time.

– Article by Dr. Ramakrishnan Raman, Director, Symbiosis Institute of Business Management (SIBM), Pune, and Dean, Faculty of Management, Symbiosis International (Deemed University)

Source: indiatoday.in-education-today