– Compiled by Savithri Rodrigo

Heshana Kuruppu

Channa Manoharan

Q: How has increasing automation impacted the financial arena?

Heshana Kuruppu (HK): Automation has both positive and negative impacts. It improves efficiency by eliminating manual processes but conversely, it poses a threat to those who are engaged in repetitive routine work.

Channa Manoharan (CM): It has reduced transactional and routine tasks, and enabled accounting and finance professionals to focus on value added services. Automation shifts finance functions towards business partnering, and offers financial insights for biz growth and efficiency.

Q: Does innovation play a major role in this regard?

HK Yes. Technological innovation improves the way we do things and could be applied across multiple sectors. Through collaboration and open-mindedness, innovative solutions can be found and technology facilitates this – a trait that applies to finance too.

CM An innovative mindset is required to reimagine possibilities and use technology as an enabler. However, many organisations face challenges in creating a sustainable culture of innovation within traditional structures.

Q: How have CFO duties evolved to include greater technology responsibilities?

HK CFOs are expected to play a business partnering role; it is not about historical numbers alone but more to do with business value creation. The CFO profile and skill set must change as more organisations are adopting digital transformation initiatives. It needs to evolve as a future fit role to be a catalyst of technological change, thereby driving digital initiatives.

CM Emerging technology including robotic process automation (RPA), data analytics, AI and blockchain can transform the finance function into a true business partner. CFOs must lead tech adoption with a deep understanding of the advantages and risks. Organisations where CFOs have taken the lead through intelligent process automation (IPA) – focussing business insights by way of data analytics and business intelligence (BI) platforms – have reaped benefits.

Q: Is there an opportunity to transform finance departments?

HK Yes, from numbers to business insights, and value reporting to enabling and creation.

CM Certainly, through IPA, data analytics, BI platforms and AI.

Q: How are organisations managing the balance between technology and manual intervention?

HK The modern ABCD of technologies affecting finance are AI, blockchain, cybersecurity and big data. Routine manual tasks can be automated or converted to RPA. However, we require human intervention (more intellectual than manual) to write the rules, interpret results and come up with strategies.

CM Organisations with a systematic approach, and correct understanding of the possibilities and risks, demonstrate the right balance. A business led digital strategy is key to success while strong change management capabilities, adopting agile practices and a clear road map focussing on ROI will contribute to a balanced approach to technology adoption and digitisation.

Q: In what ways do financial entities need to rethink the customer experience?

HK Various technological platforms are driving the world to become a shared economy, through which the cost to end consumers decreases. The traditional intermediary role of financial institutions is being challenged and requires a rethink of business models, offering a different value proposition that reduces the cost of funding.

CM An ‘outside’ thinking mindset is needed. Financial entities must reimagine the customer experience, and gear their people, processes and technology, to support both external and internal clients. These entities also need to consider co-creation of products and services with customer centricity in mind.

Q: Has Sri Lanka achieved progress in terms of financial inclusion and/or financial literacy?

HK  Financial literacy is comparatively low especially in the rural sector. While progress has been made over the years, there’s a bias towards consumption connected with short-term thinking, thereby creating a negative impact. This is prevalent even among affluent segments of society.

CM  The National Financial Inclusion Strategy will increase financial accessibility for micro and SME ventures, and a common digital platform with open APIs would offer greater accessibility for all. Government, financial institutions and accounting bodies must improve financial literacy to help citizens make informed choices.

Q: What are the main governance concerns when it comes to the finance profession?

HK  Most organisations comply with external governance requirements stipulated by the Companies Act, accounting standards, listing rules and other frameworks. However, the question is how far they’re internalised and have been embedded in the organisational culture. Therefore, the challenge for the finance profession is to drive this internationalisation.

CM  Finance professionals face a common governance challenge from the national level cascading to organisations. The main concerns are transparency, money laundering, ethical biz practices and regulatory compliance. Finance professionals must focus on taking proactive steps to improve processes, leveraging technology with relevant insights to manage risks.

Q: How does IT come into the picture in terms of dealing with vulnerabilities and keeping entities safe?

HK  There’s always a possibility of cyber-attacks so cybersecurity is a top priority in the corporate agenda. But complex and fragmented legacy IT systems can hinder cybersecurity progress, and affect the safety of assets, data and information.

CM  Cyber-threats are a major concern in IT taking a more preventive approach to protect systems and data. Today, it is imperative to have a Chief Information Security Officer to manage risk proactively, and drive the IT governance and cyber-resilience framework.

Q: Is the finance sector embracing disruption and preparing for future scenarios?

HK  Many financial institutions are driving digital banking services, virtual branches and mobile banking, and offering fintech solutions. And the Central Bank of Sri Lanka has commenced operating a regulatory sandbox to encourage fintech initiatives.

CM  Fintech companies have captured market share by disrupting spaces that have hitherto been the domain of conventional banks. Major investments are made to develop digital strategies, adopt new business models and experiment with emerging technologies, while the regulatory framework must enable fintech and pure play digital banks to adopt new technology.

Q: And will the likes of AI and machine learning lead to a sector transformation?

HK  It is already evident. AI is certainly helping change customer on boarding (with chatbots) and evaluation, and reducing costs through automation.

CM  Yes, but in introducing systematic and responsible adoption of technology, and having the right formula for data privacy, organisations should implement an enterprise AI strategy.

Heshana is the Group Chief Financial Officer of David Pieris Holdings
Channa is the Advisory Leader of PricewaterhouseCoopers