Tracking India’s finance industry, where change is the only constant

It’s the year 1996.

Seemant Shrivastav has just cleared his Chartered Accountancy (CA) foundational exams. At his first job, he is assigned tasks like posting accounts, balancing books, reconciliation, and creating books from single entries. “Businesses used to have handwritten books which had to be checked manually,” he says, reminiscing the years gone by. “These tasks may be alien to today’s generation as accounting software has completely taken over,” he says.

It’s the year 2016.

Sakshi Jhajharia is a freshly minted CA, pursuing her articleship at a firm in Kolkata. Jhajharia specialises in indirect taxation. She remembers her work before and after the introduction of the GST law the very next year. “Before, the nature of work involved more compliances, presentations, impact assessment for companies and industries and so on,” she says. “But GST was totally new for everyone. We were more involved in understanding and interpretation.”

Since then, Shrivastav has dabbled in many roles – from finance manager at top retail companies to CFO advisor – and is now the Co-founder at Mool, a personal finance platform. Jhajharia is currently an Associate at PwC, with a specialisation in indirect taxation.?

Their experiences are decades apart, but they say a similar story – that of an ever-evolving finance industry, where change is the only constant.

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Biggest disruptors

In a constantly changing technological landscape, a new reality is refocusing finance’s roles and responsibilities – automation. According to a Deloitte survey of 800 finance and accounting managers, directors, and CFOs, nearly 30% feel that automation has already significantly impacted the way their company performs its work. Additionally, more than half said they believe that automation will impact their company within the next five years.

When Sonam Srivastava entered the finance industry in 2010, India was just warming up to the idea of using algorithms. “I remember developing algorithms and standing next to traders as they made key trades, ensuring they could trust the system. Fast forward to today, algos are everywhere,” says Srivastava, now the founder of Wright Research.

?? Read Sonam Srivastava’s full post here.?

Technology, in its different forms, has swept the industry, as seen by the number of fintechs currently operating in India. A report by Bain and Company shows that the country is home to 7,000 fintech startups, working in areas like digital payments, co-lending and venture financing.??

Srivastava adds that the use of quant and artificial intelligence (AI) has become indispensable. AI now joins automation as two of the biggest disruptors in the financial industry. A global study conducted by EY in 2020 predicted that AI will be an essential business driver across the industry in the next two years. Around 77% of business leaders who were part of the study anticipated AI to possess high or very high overall importance to their businesses.

Indeed, that is playing out now. From banking to insurance, cryptocurrency to investment management, AI is slowly but surely making its mark across the length and breadth of the finance industry.

But some believe that the human touch will still be crucial to finance. Like Anand K Rathi , who has been an investment manager for 19 years now. He says technology has pushed the limits of the investment process. “We can process transactions worth crores, which used to take at least a day before, in a matter of minutes now. But while I think technology will help the industry, a lot of work still needs to be done by humans who face the customers.”?

?? Read Anand K Rathi’s full post here.?

Domino effect

Finance as an industry cannot operate as a standalone entity. It is heavily influenced by several factors, both internal and external. Anything from local government policies to global geopolitical tensions has a cascading effect on this sector.

For instance, shockwaves from the recent banking crisis across the U.S. and Europe reached the shores of the Indian subcontinent. Markets were trading in red and doubts were raised about the resilience of the banking system here.

But this is not the first time that the industry has been faced with such a crisis. Sachchidanand Shukla , Chief Economist at Mahindra Group now, recalls the 1997 financial crisis that gripped much of East and Southeast Asia. He was on a business management course then, excited to step into the world of finance.

The crisis began with the financial collapse of the Thai baht and put an end to the boom that came after the 1991 Indian economic reforms. “The financial sector was just in its nascent phase. Equity markets were comatose and the need for safety and capital preservation was overwhelming. More importantly, for us looking at the job markets, it seemed there was little to hope for,” he says.

?? Read Sachchidanand Shukla’s full post here.

But how did the industry overcome that situation? Shukla says it was all about embracing change as a chance for growth. “The resilience shown by the financial sector was due to tectonic shifts in the policy, regulatory, and operational spheres.”

Taking these technological and regulatory adjustments in stride will be crucial to the industry in the coming years too, he says.

Being skills-ready

The finance industry in India is constantly changing. And so are the skills needed for professionals who are looking to make a career in it. In fact, seven of the current top 10 skills for India’s finance sector professionals did not exist in the same form in 2015, says data from LinkedIn’s Skills Evolution 2022 report.

So how can finance professionals equip themselves?

Staying constantly updated about your field is key to survival, says Jhajharia. “This for some professionals could mean consistent reading of case laws, advisories, and notifications. You need to develop a sound understanding of the legal and regulatory framework in your field of work.”

?? Read Sakshi Jhajharia’s full post here.

Shrivastav says problem-solving and data analytical skills will be crucial. “As finance becomes more data-driven, finance professionals will need to develop expertise in problem solving, data analytics, visualisation and develop critical thinking to make sense of the vast amounts of data generated by new technologies.”

?? Read Seemant Shrivastav’s full post here.

He adds that finance professionals will need to have a solid understanding of cybersecurity best practices and be able to identify and mitigate potential risks. Indeed, the banking and finance sector in India was the most cyber-targeted in the region in 2022, says a report by CloudSEK.

“Unlearning old things and relearning new ones is the only way to keep pace,” he says.

How can professionals equip themselves for a constantly evolving finance industry? Share your thoughts in the comments below.

Reported by: Preethi Ramamoorthy

Creator Manager: Aanvi Kamdar