Crucial competencies for finance jobs in NZ
There’s a lot to master, but it’s so worth it.
Last updated: 15 November 2023
Embarking on a career in finance is a journey filled with opportunities for growth, challenges to overcome, and rewards to reap. Whether you're just starting your financial career or seeking to bolster your existing skill set, this comprehensive guide will provide you with the essential skills required for success. We'll explore the key competencies and qualities that not only make you a valuable asset to employers but also pave the way for a fulfilling and prosperous career in finance in Aotearoa New Zealand.
1. Analytical Skills
Imagine analytical skills as the compass that guides you through the intricate landscape of finance. To those on the outside, it may all look like black magic, but you know these skills are the foundation for every financial decision:
- Critical thinking: Your ability to evaluate information objectively, analyse complex data, and make informed decisions is paramount. Critical thinking helps you navigate financial challenges with confidence.
- Problem-solving: Finance often presents puzzles to solve. Effective problem-solving skills allow you to identify issues, devise solutions, and adapt to changing circumstances.
- Numeracy: Unsurprisingly, a strong grasp of mathematics is essential if you’re looking for success in finance jobs. Whether it's calculating returns, managing budgets, or assessing risk, numeracy is the language of finance.
- Data interpretation: Understanding and interpreting financial data, including balance sheets, income statements, and cash flow statements, is crucial. This skill means you can extract useful insights from financial reports to drive future decision making.
- Ratio analysis: Mastery of financial ratios such as liquidity ratios, profitability ratios, and leverage ratios enables you to assess a company's financial health.
- Financial modelling: Creating financial models to forecast future performance and assess investment opportunities is a key skill. At the basic end, this involves using spreadsheet software like Excel, while at the more advanced end it might involve specialised statistical analysis packages such as R or SPSS.
- Valuation techniques: Understanding various valuation methods, including discounted cash flow (DCF) analysis, relative valuation, and market multiples is important. These methods are vital for assessing the value of investments.
- Risk assessment: Identify and assess financial risks. This includes credit risk, market risk, and operational risk, and it helps you protect assets and investments.
A knack for analysing trends in data is key for many finance jobs.
2. Accounting Principles
Accounting is the language of finance, and fluency in this language is indispensable. There’s a lot of jargon in finance, so don’t worry if it takes you a little while to get your head around it all.
- GAAP/IFRS knowledge: Familiarise yourself with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) to ensure accurate financial reporting.
- Financial statement analysis: Interpret financial statements, including the income statement, balance sheet, and statement of cash flows, to evaluate a company's financial performance.
- Budgeting and forecasting: Develop skills in budgeting and forecasting to help organisations plan and allocate resources effectively.
- Taxation: Understand taxation laws and regulations, as they have a significant impact on financial decisions and strategies.
3. Risk Management
Finance is not just about making money; it's also about safeguarding assets and investments from potential threats. This means being able to identify and mitigate risks as they come down the track:
- Risk assessment: Evaluate and quantify risks associated with financial decisions. This involves identifying, analysing, and prioritising risks.
- Portfolio diversification: Learn the art of diversifying investment portfolios to spread risk and maximise returns.
- Hedging strategies: Understand hedging techniques, such as derivatives and options, to protect against adverse market movements.
- Compliance and regulations: Stay up-to-date with financial regulations to ensure that your organisation complies with legal requirements.
4. Communication Skills
Finance professionals don't work in isolation; they collaborate with colleagues, clients, and stakeholders. Effective communication is the bridge that connects financial expertise to decision-makers.
- Clarity: Convey complex financial concepts in clear, understandable language. You can be the world’s best finance analyst, but if you can’t communicate your ideas to those who don’t speak your sector language, this means very little in practice.
- Presentation skills: Deliver compelling presentations to communicate financial data and insights effectively. This skill is particularly crucial for financial analysts and advisors who need to communicate to colleagues in other departments, or to C-suite executives.
- Interpersonal skills: Develop strong interpersonal skills to build trust and rapport with clients and colleagues.
You'll need to break down your ideas without relying on financial jargon.
5. Financial Technology (FinTech)
The finance industry is evolving rapidly, driven by technological advancements. Familiarity with financial technology is no longer a luxury; it's a necessity if you want to advance your career and climb the ladder.
- Data analytics tools: Learn to use data analytics software and tools to derive insights from large datasets. Skills in data visualisation, SQL, and data mining are highly valuable.
- AI and machine learning: Familiarise yourself with artificial intelligence and machine learning algorithms. These tools are increasingly used for predictive analytics and investment strategies, which are core elements of many finance jobs in New Zealand.
- Cybersecurity awareness: High profile data breaches in recent years have shown us the damage, both financial and reputational, that such incidents can cause to business. As such, it’s vital that you understand cybersecurity principles to protect financial data and assets from cyber threats.
6. Ethical Conduct
Ethical behaviour is non-negotiable in finance, and there are a whole host of laws you’ll need to comply with to work in this field.
- Code of ethics: Familiarise yourself with industry codes of ethics, such as the CFA Institute's Code of Ethics and Standards of Professional Conduct, and adhere to them rigorously.
- Confidentiality: Respect the confidentiality of financial information. Breaching confidentiality can have severe legal and ethical consequences.
- Transparency: Promote transparency in financial reporting and transactions. Honest and transparent practices build trust with clients and stakeholders.
- Compliance: Ensure compliance with relevant laws and regulations, including anti-money laundering requirements.
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