The European Centre of Technology (ECT) is regularly in contact with its experts worldwide in order to disseminate the latest knowledge in Finance, Management, Engineering and Computing topics. The ECT runs regular educational seminars on a range of Finance topics, which can be viewed at the Department of Finance.
The ECT, which works with the United Nations Environment and major universities to promote best practice, this month is delighted to speak with Mary Fletcher from the University of the West of Scotland.
Mary is a financial expert with many years of practical and academic experience in the sector. We have put questions to her which have been received by us from our audience, regarding common misconceptions about finance, and why it is such an important subject to understand.
Your decisions will affect the financial well-being of your organisation and understanding how this happens will help you to contribute more effectively and make better decisions.
The way the Finance industry is structured is that people are often entering into financial arrangements without being aware of the risks that they are running or what the effects might be
Why do you think that Finance seems so daunting to individuals outside of the Finance industry?
“I think part of the problem is that when we think of finance we think that it involves experts and complicated equations and ideas that are beyond the grasp of someone who is not an expert. We think that finance is a bit of a mystery understood by only such people. Another problem is that it involves some new terms that we are not very familiar with, such as payback and discount rates and so on. There have been some moves to introduce financial education at school level, which can only be a good thing, but it does not help those who have already left school and feel a lack of confidence in discussing this area.”
Why should all individuals, regardless of their role within an organisation, have some basic understanding of Finance Fundamentals?
“Understanding how finance works within your organisation can contribute both to the success of your organisation and the success of your role within it. The success or failure of the business will depend on the choices made by people at all levels and these choices will have implications for the finances of the organisation. Your decisions will affect the financial well-being of your organisation and understanding how this happens will help you to contribute more effectively and make better decisions. An understanding of finance is also very helpful for your personal life, as it helps you to feel more confident in making decisions.”
Do you have any advice for individuals currently in a non-Financial role, who are looking to learn more about Finance?
“I would say that you should not let a lack of confidence hold you back from finding out more. The more you can understand about how finance works the better you will understand your organisation and the better you will be able to communicate with a wider range of people across your business. You will come across as a much more engaged and responsible individual if you have a grasp of the finances of the organisation and it will help you also to see where savings can be made and why plans are sometimes shelved. For example, even if you want to buy a package for your PC at work, there has to be system for buying new software and a budget for software, so that anyone can’t just buy anything at any time.”
What is it about Finance that you personally find interesting?
“Lots of things! Finance is about money, but so much else besides. It is about trust, it is about decisions, it is about communication. It tells the story of a business and an individual in the decisions that have been made, to buy and sell, to borrow and lend. It is something that is important from the micro to the macro, so the individual finance decisions we make when we buy a car are contributing to the big picture of the borrowing profile of the UK. I find that having a knowledge of finance helps me to understand the implications of my financial decisions and the financial decisions of companies. I am also interested in investigating the advertising of finance and the way we think about borrowing. The psychology of finance is fascinating. Our attitude to credit, for example, is very different from that of a former generation.”
Do you think that the reputation of the Finance industry has fully recovered since the 2008 Financial Crash?
“I feel that the reputation of the Finance industry has not fully recovered since the 2008 Financial Crash, but at the same time we are still over-confident about our financial system. Changes have been put into place to try to prevent bank insolvency, but I feel that less care has been taken of personal borrowers. The way the Finance industry is structured is that people are often entering into financial arrangements without being aware of the risks that they are running or what the effects might be if they are not able to repay loans in the time they anticipate. This is where an understanding of financial basics can help so that customers are not carried away by the attractive advertising that often accompanies these products.”
If you would like to develop your finance skills this year, visit the ECT’s Department of Finance page in order to access a range of educational resources.
Participants attending the courses include representatives from the UK Green Investment Bank, Deutsche Bank, Siemens, SMEs, students and consultants aiming to consolidate their knowledge and achieve their career goals.
For more information please visit: