Good morning. What will the future of finance look like? Adena Friedman, chair and CEO of Nasdaq and C.S. Venkatakrishnan, group chief executive at the global financial services company Barclays, shared their predictions during the Fortune Global Forum conference in New York City this week.
“I think this is a renaissance period for technology in the industry, and it will be for the next decade,” Friedman told Fortune executive editor Lee Clifford.
New York-based Nasdaq provides technology to 130 other markets around the world in addition to its own, Friedman said. Driving more liquidity into those domestic markets will require opening up the capital flows with less friction in terms of global payments, she said. Payment rails will modernize, and great use of cloud services in running markets will create more scalability, Friedman said. “AI plays a huge role in all of that,” she said.
Friedman also pointed out that cybersecurity will have to become even more sophisticated to “manage crime out of the system.” It’s critically important that banks and companies like Nasdaq, which provide services to banks “leverage the AI capabilities to the best of its ability in order to catch the bad guys,” she said.
The future of finance is data-centric, Venkatakrishnan said. One example he cites is harnessing and analyzing data more efficiently in order to improve financial and investment decisions.
CFOs are preparing for the finance function to be redefined by AI and automation allowing everyone from accountants to financial planning and analysis professionals to focus more on strategic thinking. Some startups are even developing “AI coworkers” for CFOs.
So what types of skill sets are executives looking for in employees to usher in this new era of finance? “Clearly in the banking industry or in finance, some amount of economics and finance and accounting is important,” Venkatakrishnan said. “But the technological skill set and the ability to use it and understand its potential and its risks is absolutely important.”
Since Nasdaq is a technology company, about 50% of its people are in the development and engineering organization, Friedman said. As Nasdaq continues to bring more AI capabilities into its products and embed them into the agile teams, “data science is a critical component of our skill set, data engineering as well,” Friedman said.
However, soft skills are still essential, too, she said. “And one of the things that we really focus on is having a culture where we have constant curiosity and a growth mindset,” she added.
To hear more of Friedman and Venkatakrishnan’s insights, and their take on the post-election market, you can watch the full interview here.
Sheryl Estrada
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The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Mahmoud Reza Banki is the new chief financial officer of Elon Musk’s X Corp, a social media platform. Banki, a former CFO at chief strategy officer at Tubi for six years, joined X in November, according to his LinkedIn page. Banki was pardoned by former President Donald Trump in January 2021 in a case in which he was charged for making false statements in 2010, The Wall Street Journal first reported. Linda Yaccarino, a former NBCUniversal advertising chief, joined X as CEO last year. Trump, the U.S. president-elect, named Musk and former Republican presidential candidate Vivek Ramaswamy as co-lead of a newly created Department of Government Efficiency on Tuesday.
Travis Swenson was appointed CFO of Two Harbors Investment Corporation (NYSE: TWO), a mortgage REIT, effective May 5. Prior to that date, he will serve as deputy to interim CFO William Dellal, who will then resign from the role. Swenson arrives from Colliers Mortgage Holdings, where he had served as CFO since 2020. He previously was global head of client accounting services at WeWork and is a board member and the audit committee chair for aviation conglomerate Air T.
Big Deal
Wall Street bonuses are set to soar this year as financial professionals eye an improving business environment, according to a new report from compensation consulting firm Johnson Associates. Amid strong revenue growth and a post-election stock market surge, investment banking incentives are on course to rise 25% to 35% for debt underwriters and 15% to 25% for equity underwriters.
Only retail and commercial bankers are likely to see their bonuses stay flat or decline, the report found. The firm said its analysis includes proprietary data points and public data from 13 of America’s largest investment and commercial banks and 17 of the country’s largest asset management firms.
“Virtually every sector in the industry is performing strongly this year, with the exception of retail and commercial banking,” said Alan Johnson, the firm’s managing director. “Firms are in a strong financial position to do what they haven’t been able to do since 2021—reward their professionals with larger bonuses.”
Going deeper
How Can Organizations engineer quality software in the age of generative AI is a recent article from the Deloitte Center for Integrated Research. Gen AI is already being integrated across the software development life cycle, with organizations seeing dramatic benefits in improving developer proficiency and with tasks like developing product roadmaps. A three-part series from Deloitte covers how different C-suite leaders can play unique roles to spearhead AI integration while safeguarding and maintaining quality.
Overheard
“The reality of your business and career is overcoming adversity. The only way to do that is to fail, and the only way to fail is to put yourself in uncomfortable positions. If you fail, and then you figure out a solution for the people you work with to overcome the failure, you gain a lot of self confidence, and if you gain self confidence, you’ll get a better chance for the next opportunity to succeed.”
— Tom Brady, a seven-time Super Bowl-winning quarterback, Fox Sports commentator, and entrepreneur, said at Fortune Global Forum on Tuesday in a conversation with Fortune editor-in-chief Alyson Shontell and Harvard Business School professor and Thrive Capital executive chairman Nitin Nohria.
