The Association of Corporate Treasurers and Association of International Certified Professional Accountants are seeing signs of a pick-up in demand for courses and training as treasurers, bankers and other financial professionals look to brush up on their skills for managing in highly volatile markets amid soaring inflation and rising rates.
Sarah Boyce, associate director of policy and technical at the ACT, says the forbidding economic outlook comes after over decade of a relatively stable operating environment – making it especially tough on younger treasurers and bankers.
“It is a generational challenge that is unfolding here for both the buy and sell side,” says Boyce. “A whole cohort of people now in the industry have never experienced market volatility to any great extent, certainly not rising interest rates or inflation so it’s a very new world for them. They don’t necessarily know how to operate under those conditions, have the skills to do so really because they just haven’t needed to have them.”
Boyce, former director of treasury at confectionary giant Cadbury, adds: “For those that have been in market much longer there’s a definite sense of deja vu. Whether it was the financial crisis of 2007, the late 90s dot.com bubble, or the European debt crisis in 2009…there’s a lot of us who have seen it before and are actually a little surprised how we’ve fallen out of the practice of managing risk in such an environment.”
Horses for courses
The ACT offers a range of courses leading to internationally recognised treasury and finance qualifications. Boyce says that while qualified members will already be armed with a lot of the knowledge needed to operate in a testing environment, there are many “accidental treasurers” who are not so fortunate.
“There is a large group of people who undertake treasury duties as part of, for example, their FD, CFO, or accounting role, so they will not necessarily even know what skills they are lacking – there are a lot of very small treasury functions within many organisations that don’t have a dedicated treasurer. It is this group of people that will be most challenged by the headwinds.”
According to Boyce, there has been a pickup in demand for continuing professional development (CPD) courses at the ACT both at the individual level and in-house training for groups within organisation.
At the individual level, recently qualified members with limited real-world experience are especially keen on heading back to the classroom.
“This is a group that will know the theory and wants to get a bit more colour around the practice of how one might do things, the art of the possible,” says Boyce. “They aren’t necessarily looking for solutions, rather they want to know what can be done, understand the latest developments in forecasting, for example, or how to go about refreshing treasury policies.”
The ACT is particularly keen on helping students with understanding how the multiple ongoing shocks ranging from inflation to Ukraine might impact tomorrow’s markets. The organisation is also eager to highlight the vital role corporate strategy plays in treasury operations and the importance for treasurers to appreciate that fact fully.
“Understanding tomorrow’s markets is taking up a lot of everyone’s time at the moment, perhaps more so than in the recent past, because there are now so many moving parts,” says Boyce. “Understanding corporate strategy and appetite for risk is crucial as well as it will very much influence what they need as treasurers, and the action they need to take. Liaising and talking with a lot to senior management is therefore crucial.”
Fit for purpose
Signs of pick-up in demand for CPD from treasurers and financial professionals generally are also being seen by the Association of International Certified Professional Accountants (“the Association”), which represents The Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Professional Accountants (AICPA). The two bodies joined forces in 2017 and combined boast 690,000 members worldwide across 196 countries.
“Anecdotally, we have seen growing interest from our members, students and engaged professionals in issues such as higher inflation levels, supply chain disruption and business resilience,” says Ash Noah, vice president & managing director of learning, education and development at the Association. “This has been coupled with an interest in the deeper, long-term changes to our sector driven by digital transformation.”
As well as offering practical tools around scenario planning and risk management, along with access to a growing library of learning resources, the Association has been busy reworking its core learning portfolio to ensure it is fit for purpose. In 2021, it reworked 90% of the portfolio and released new courses on data analytics and agile finance transformation. A recent initiative aimed at helping its members keep their skills up to date is its Annual Update for Controllers, a course which teaches leading-edge topics in managerial accounting and finance.
After a lengthy period of relative stability, says Noah, the recent volatility in exchange rates, interest rates, fuel costs and inflationary pressures has created challenges for finance professionals who have not had to navigate through variable conditions like these before.
“In this economic environment, treasury management competencies have become even more critical,” says Noah. “To take one example, many professionals in markets such as the UK, US and Europe will not have had recent exposure to the challenges of operating in a high inflationary environment. At the Association we have been sharing insights from members in markets such as China or regions like Africa where this has been a challenge for some time.”
“Now more than ever finance professionals must ensure their liquidity management provides adequate cash flows for operations, manage foreign exchange risks and short-term borrowing requirements, and ensure interest rate risks are properly hedged.”
In addition to their operational responsibilities, treasurers must also be armed with the management skills required for making long-term strategic decisions around allocations of future cash flows, says Noah, noting that the future viability and competitive position of an organisation is built on these decisions.
“It is therefore important to ensure that the finance function has a thorough understanding of the business context and the strategy of the enterprise and has the high-quality technical treasury management skills to take the lead in key strategic areas,” he says. “These could include mergers and acquisitions, funding new business initiatives, long-term borrowing and planning the financial strategy around capital and debt structuring.”
The need for professionals to keep their development up to date to retain competence is not new and has always applied, regardless of age, says Noah, pointing to a report by consultant Korn Ferry that estimates half of all employees will need reskilling by 2025.
“Knowledge is a perishable good, so it is crucial that finance professionals learn, unlearn and relearn new skills and competencies to stay relevant and employable throughout their professional lives,” he adds. “There is high demand for highly skilled professionals who can successfully help their organisations navigate disruption and prepare for whatever comes next.”