Finance students and professionals spent much of 2020 grappling with the challenges brought on by the COVID-19 pandemic. Schools went to online classes, stock exchanges went to remote trading, personal trading saw record transactions, mobile banking dealings increased and customer service agents worked from home.
While most industries weathered these dramatic changes and continued operating, the winds of change continue to blow. As a result, financial institutions are thinking more strategically about technology and questioning whether their current tools are the right ones to use going forward.
Keeping these changes in mind, here are five emerging trends and the opportunities that graduates from a Master of Business Administration (MBA) program with a concentration in Finance must understand to be relevant and effective in the workforce:
- Systems Modernization
Modernizing out-of-date core systems will be imperative going forward. The events of 2020 put the financial industry’s infrastructure to the test, challenging existing structures. For example, many core systems were unable to handle the volume of transactions that came through during the COVID-19 pandemic. Therefore, dated systems struggled to keep up with the added demands.
Financial management is looking to adopt new and emerging technologies to improve operational efficiencies. A valuable skill for recent MBA Finance graduates is hands-on experience with tools, technologies and platforms specifically focused on financial management.
- The Rise of Financial Technology (FinTech) Companies
Due to Digital Finance and Digital Money (DFDM) growth in financial fields, there has also been an emergence of FinTech companies. DFDM covers many financial products, financial businesses, finance-related software and new customer communication and interaction forms — all of which are made possible by Financial Technology (FinTech) companies.
Once seen as competitors, FinTechs are now the ideal partners for banks because of their ability to keep up with technological breakthroughs. FinTech companies can provide tech-enabled banking products like marketing, administration and loan servicing. As a result, bank and FinTech company partnerships are reshaping the financial services landscape.
MBA graduates who pursue a career path with FinTech companies must learn the new ways to engage with technologically savvy customers and gain a comprehensive understanding of DFDM.
- Blockchain and Cryptocurrency
Another trend emerging is the growing number of corporations and consumers moving towards blockchain-based transactions and financial services, also known as cryptocurrency. This is a digital or virtual currency protected by cryptography, making it nearly impossible to counterfeit or double-spend (spend more than once).
Supported by blockchain technology, cryptocurrencies like Bitcoin, Ethereum and Ripple are gaining more attention as businesses question the need for cash. A financial system backed by blockchain could offer businesses many growth opportunities.
Some analysts predict worldwide spending on blockchain solutions will grow to around $16 billion by 2023. Therefore, knowledge of cryptocurrency and blockchain technology will be crucial for future finance professionals.
- Reporting and Data Analytics
Reporting is faster and more easily accessible with recent digital tools. Technological advances are enabling investors to gain real-time access to data, thanks to advanced analytics.
It’s nothing new for financial businesses to use data analytics to help clients gain valuable insights, identify process improvements or help companies manage risk better. But now, companies can use artificial intelligence (AI) and machine learning (ML) capabilities to enable enhanced data to support more advanced analytics and data visualization tools to deliver insights in real time.
Because of this growing need for reporting, the demand for graduates with experience in data analytics will soar.
- Digital Transformation
Finance professionals will have to consider the significant role technology now plays in the financial industry. As banks and financial institutions strive to become more technologically agile, they will need to examine the value of their operations as customer preferences and lifestyles change.
As the industry copes with the advances made because of the COVID-19 pandemic, companies’ ability to transform themselves will directly impact their strategies to survive the next evolution. Therefore, graduates must keep up to date about the new technology available and understand the risks and challenges involved in implementing it.
MBA Graduates Needed
The need for modern systems, the rise of FinTech companies, blockchain and cryptocurrency, data analytics and a digital transformation are all set to contribute to the future of finance. While banks and financial institutions rallied to overcome the COVID-19 crisis, the need for highly educated and versatile MBA Finance graduates is undeniable in a post-pandemic world.