Luis von Ahn, co-founder and CEO of language-learning app Duolingo, shared earlier this month in the BBC CEO Secrets series that he wished he’d concentrated more on social skills earlier in his career rather than purely academic success. Von Ahn was a full-time computer scientist before Duolingo took off and as he says his job nowadays is dealing wholly with people problems and he views social skills as essential management skills.
Cultures of work, collaboration, and team building are changing, and financial professionals are finding new ways to work together, and for clients.
The renewed importance of social justice, equality, and equity of opportunity, especially in essential services such as finance, cannot be underestimated. These changes have ushered in new cultures of communication, purpose-led employment and how people treat each other. These changing expectations are expanding what work, and what a workplace, could and should be.
Much has been made of the importance of “soft skills” and social intelligence being integral to creating meaningful cultures of management. But we want to take this idea and expand it into our realm – that of the importance of social skills in finance.
What are social skills?
“A social skill is any competence facilitating interaction and communication with others where social rules and relations are created, communicated, and changed in verbal and nonverbal ways”.
In short, social skills are tools to create relationships between people in any interaction, and good social skills consider the full range of human interaction: verbal, and non-verbal communication, decision making, and behaviours delivered through empathic consideration, collaboration, and compassion.
These skills are the foundation of good behaviours, societal harmony, trust, and fairness, and serve as the basis of any positive relationship between people or groups of people.
A deficit of social skills creates anti-social behaviour. Social skills, or a deficit of social skills, are developed and learned over time, and can change and augment based on positive and negative inputs such as destructive or abusive relationships, positive social and workplace interactions and dynamics, or a lack of interaction or education from peers, colleagues, friends, and mentors.
Development of good social skills has been credited with how people effectively negotiate or persuade others, how people “evolve compassionately and grow psycho-socially with people”, and how people react to stimuli with compassion and empathy.
Social skills are often conflated with soft skills, but both are simply different descriptors of the same thing: how you consistently deploy social intelligence in the context of your work, friendships, relationships and community.
Why are social skills in finance so important?
Client-first service
- The client comes first, and away from the digital or accounting tools you employ to make sure you’re both an agile financial professional and diligent service agent, social skills are integral in creating that most ephemeral of professional connections – a bond of trust.
- No matter your line of work in finance, you need to be able to communicate succinctly, react appropriately, and confidently advise and persuade your client base. Social skills are essential in creating clear lines of communications, which in turn creates a more trusted relationship. This, in turn, improves your return on investment, improves your clients’ returns and makes you (in a perfect world) more revenue.
To sell with creativity
- Having well developed social skills provides a latticework of understanding on when, and how, to market and sell your service or product.
- Social skills are the vehicle on which you sell your service, and they provide context to your industry knowledge. Potential clients need to see, feel, and know that you provide a diligent financial service – that takes nuance, good sales technique, the ability to rapidly adjust your approach to answer any questions, and a confident and coherent sales approach that gives your client what they want to see, not what you feel they should.
- Good social skills create successful sales cultures because it values the relationship over intangible KPIs and provides context and personal meaning to dispassionate data.
The basis for ethics
- Good financial conduct and best practice, together with internal control processes, HR, and disciplinary actions, are only as effective as the people operating within the parameters of them or directing them.
- Social, communication and empathy skills – including more leadership-focused traits such as the ability to manage, train and direct teams, apply disciplinary actions, and adhere to complex regulatory limits – are equally important in creating a cultural framework of diligence and rule following and integral to creating trust with financial stakeholders across your business and wider network.
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FAQs
Communication and interpersonal skills are critical for finance professionals for several reasons. Firstly, as a finance professional, you must handle complicated financial data that needs to be presented to clients, stakeholders, or other team members.
Why are social skills important in accounting? ›
Moreover, communication skills are vital in building and maintaining relationships with clients, colleagues, and other stakeholders. Accountants need to communicate with empathy, ensuring that non-financial individuals can grasp the implications and significance of financial data.
How important are social skills? ›
The way we socialise and interact with others, be it with family, friends, colleagues, peers and others, will impact on almost every aspect of our lives. Social skills help children to form positive relationships, have conversations, develop body language, cooperate, share and even play together.
Do you have to be social to be in finance? ›
Yes, You Do Need Social Skills to Excel in a Finance Career.
What are the most important finance skills? ›
To succeed in finance, professionals need a range of skills, including data analytics, digital proficiency, communication, business acumen, and budgeting, among all. Technical skills in finance, such as financial modeling and data analysis, are increasingly important in the digital age.
Does business require social skills? ›
Your company will perform better if your employees are adept at developing relationships with colleagues, clients, and customers. It will improve employee recruitment and retention, increase employee morale and engagement, and help you gain repeat customers and clients.
Why are people skills important in accounting? ›
Help Build Client Relationships
Accountants also need to listen to clients' needs, concerns, and goals to provide tailored financial advice. With solid communication skills in place, accountants can effectively foster trust and understanding, both of which are essential for client retention and satisfaction.
Why is social responsibility important in accounting? ›
According to the findings of the study, economic and social responsibility accounting both play a part in reducing the impact of adverse economic conditions such as unemployment, budget deficits, and the risk of consumer credit.
Why are communication skills important in finance? ›
Verbal communication is the ability to articulate thoughts and ideas using spoken words. In the finance sector, verbal communication skills are crucial for explaining complex financial concepts and strategies to clients, colleagues, and stakeholders.
What causes poor social skills? ›
Several developmental factors can contribute to the lack of social skills. Early childhood experiences, such as limited socialization opportunities or traumatic events, can impact social development. Additionally, genetic predispositions can influence an individual's ability to acquire and apply social skills.
Social emotional skills can help students set goals for themselves and build positive relationships with peers. They can also lead to long-term societal benefits that extend far beyond the individual child.
Why are social skills important in management? ›
Conflict is inevitable in any organization. Leaders with developed social skills can effectively manage and resolve conflicts by employing active listening, empathy, and negotiation techniques. This helps you facilitate open and constructive discussions, find common ground, and work toward win-win solutions.
What is social finance examples? ›
Notable examples of social finance instruments are social impact bonds and social impact funds.
Do you need social skills for investment banking? ›
Social Skills:
The skills to handle difficult people, exude a positive attitude towards life and work, have high energy to talk to clients enthusiastically, and assure them that you understand their needs and help them are crucial to building and maintaining professional relationships in the bank.
What do people in finance actually do? ›
Financial analyst: Assesses accounting and financial decisions for banks, pensions funds, insurance companies, and corporations. Financial planner: Designs financial plans for personal clients which can include investment, insurance, debt, estate, and budget recommendations.
Can introverts go into finance? ›
📈 According to a study by the Myers-Briggs Company, introverts make up 56.8% of financial professionals, while extroverts make up 43.2%. This means that there are plenty of introverted financial professionals out there who have achieved success in their field.
What type of person do you need to be in finance? ›
The majority of investment professionals have a Bachelor's Degree in Finance, Accounting or Economics. Investments advisers and bankers must also obtain a license to practice. Important skills for investment professionals include communication, negotiation and critical-thinking for working in a fast-paced environment.
Is finance a social study? ›
Finance can be a social science when it is used to look at how money relates to social interactions. Economics, which looks at the production, distribution, and consumption of goods, is considered to be a social science. Since finance is heavily related to economics, it is essentially part of that social science.
