31 Jul 2018
Tech to the rescue for finance chiefs as Brexit threatens growth
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As Heads of Finance try to anticipate the potential effects of an ever-changing Brexit, Mark Freebairn, Head of Odgers Berndtson’s Financial Management Practice in London, explores whether technology might ride to the rescue of businesses looking for growth and profitability.
For a while now organizations have been talking to their legal advisors and asking for non-billable advice about what Brexit might mean. Now, for the first time, heads of finance are telling us they’re paying law firms for specific advice as to what they need to do in the eventuality of whatever version of Brexit occurs.
Larger, international groups are further ahead on this, but really anyone with a supply chain outside the UK is thinking about it. And all the heads of finance we talk to are wrestling with the problem of how you solve a challenge without knowing what the challenge is.
New drivers of growth
More tangible is the impact on the UK economy of Brexit. For many companies, the UK has become a less attractive country to invest in. Many Directors who sit on foreign boards tell us their companies’ investment money is going into Southern and Northern Europe, Asia and pretty much anywhere else in the world before it comes into the UK. In time, that will reduce the amount of foreign investment in the UK, and therefore its growth and profitability. UK-based finance heads need to look for other means of driving growth and productivity. Technology, including greater use of automation and artificial intelligence, is increasingly one of the favorites to achieve that.
At a recent networking event we held for Chief Finance Officers (CFOs), three different people said: “We’ve launched our first robot”. All three were a success, and the CFOs were now looking at the potential cost savings that could result, leading to a very interesting conversation about how the savings created by robots might be taxed.
There’s no doubt that artificial intelligence and related technology, which can drive productivity and cost control, will become a bigger focus for the CFO and finance community – especially if business performance starts to trend down.
This means that if the UK continues to lag behind other European economies in terms of growth, this country may start to emerge as a leader in its use of new technologies and automation.
Banking on technology
Technology is also a strong theme in the next excerpt from our Brexit Report. Our Head of Financial Services will explain why the onward march of digital automation is actually a bigger threat to jobs in the City of London than Brexit. That said, the opportunity to get things right in technology could have a huge, enduring upside: positioning London to hold onto its crown as Europe’s global financial center.
These insights by Mark Freebairn, Head of Odgers Berndtson’s Financial Management Practice in London, are part of ‘Brexit, Business Leaders and Investment’, a major report from Odgers Berndtson. As leaders in global executive search, across multiple functions and sectors, we have a unique perspective that comes from being close to top executives in almost 30 countries.
To explore more of our perspectives on Brexit, click below:
- Are UK Boards set to become even more European after Brexit?
- Automation might be bigger City jobs blow than Brexit
- Brexit - The view from Germany
- Brexit - The view from Ireland
- Brexit: the view from Brussels
- Can the UK tech sector beat the Brexit skills drain?
- Taking the corporate pulse on Brexit
- UK Universities fear Brexit-driven collapse in student recruitment and funding