Why Finance?
To me, finance is the most critical aspect of any company, acting as the Central Nervous System of a firm. Businesses constantly face economic volatility, rapidly changing consumer behaviors, as well as uncertainty around trends and tools such as the adoption and implications of AI. Financial teams spot these conditions, analyze HOW they effect the business, and provide a shifting roadmap for the company on how to navigate those changes. Whether its through adjustments to cash flow management, analysis and forecasting or budgets, it provides efficiency, speed, and insight to operations to ensure that a business can minimize unnecessary risk and capitalize on opportunities, making informed decisions that ultimately will affect the ability to succeed in the long run. So far, at Olin Business school, what I have most enjoyed is seeing, through some of our case studies and lectures, the practical application of strategic decisions and their real-world outcomes. This practical application is something I love about Finance, and is something that I look forward to engaging with and seeing in my career.
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The Future of Finance
Adoption of Artificial Intelligence
Companies around the globe are feeling the pressure to adopt Artificial Intelligence. As possibly one of the most significant developments this century, it undoubtedly will shape the world in ways still not entirely known to us, and a failure to adapt will certainly result in being left behind. AI is young enough to where companies are in the perfect position to get a head start in understanding this technology, learning to use it and potentially develop their own for niche uses, not only increasing their efficiency exponentially, but creating unimaginable opportunity for growth and success. While there are concerns of a reliance on AI and a clear need for immense training and skill capability, this is something companies will need to understand and account for, as AI still requires high quality inputs to achieve desirable ouputs (trash in = trash out)
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Shifting Regulatory Compliance and Alternative Energy
The world is seeing a shift when it comes to regulatory policy, especially when it comes to the usage of energy and carbon emissions. This is not only something that companies need to account for in terms of operation and cost, but a large shift in the sources and usage of energy creates an opening for companies to capitalize on this shifting market and shakeup the existing power structure. Such a massive shift not only creates extraordinary demand for expert advice but also leaves room for innovation when it comes to product offerings, whether it be the collection and sale of data infrastructure and analytics, or the identifying and purchasing of undervalued companies and assets before they are priced in by the transition. In general, I see this shift as one of the most crucial and relevant to the future of the industry, and an expert understanding of this shift and trend is not only valuable, but crucial to the success of companies moving forward.
Uncertain Economic and Market Conditions
In the modern world, constant geopolitical threats, inflationary scares, surges in innovation, changes in policy and commodity spikes all make accurate projections and forecasts more difficult and much rarer. The margin for error widens, confidence of the company and the consumer lowers, and risk skyrockets. But, as risk skyrockets, and as most companies struggle, there is room for opportunity. A large part of the financial world is so set on their ability to accurately predict, but uncertain conditions let the firms that are able to adapt thrive. Now of course the ability to predict isn't useless, but it is critical to also be built to adapt. As a company gains optionality and becomes dynamic, whether it be in diversified revenue streams or an flexible cost base, you are not only able to avoid the detriment on these conditions, but put yourself in a position to capitalize on the appearance of cheap assets and surges in demand for expert advice. Moving forward, especially with the growth of AI, I believe the ability to predict will become standard and less important, and it is instead crucial to be able to move quickly and capitalize on opportunity when it appears.
My Goals for the Future
As I inevitably end my college journey and venture out into the workforce, I will not only interact with these trends, but I hope to shape this future that I see for the financial world. When I enter into Investment Banking or Private Equity, I want to look for companies that are leading the charge when it comes to adopting and capitalizing on AI or that capitalize on the disruption of the energy industry amidst this shifting policy. By developing my knowledge and expertise in these areas now, and as a part of the generation that grew up around these developments, I plan to have the skills, knowledge, and overall capability to help lead companies to a place where they can thrive amidst the ever-changing industry and capitalize on these growing trends and technologies.