English is the international language of business and used increasingly around the world, especially within the finance sector. So how did English become the language of international finance?
British colonialism led to the spread of the English language throughout Asia and Africa where it became the language of education and governance. As the British colonies became independent, English remained the language of trade between the 54 countries of the Commonwealth of Nations. English continued to become more widespread as the United States’ economic influence increased during the Second World War. English remained the most commonly spoken language and quickly became the de facto lingua franca of business as American companies such as IBM and GM grew and became truly multinational.
Business and financial services such as banking and accountancy around the world use English as the primary language of communication. International standards for finance such as the International Accounting Standards (IAS) and International Financial Reporting (IFRS) are all recorded in English while many terms and expressions related to banking and accounting have been coined in English.
In addition to the many international standards in English, important international bodies have also been set up and use English as the language for communication. One of these is ACCA(The Association of Chartered Certified Accountants), one of the largest and fastest-growing global professional accountancy bodies with 296,000 students and 115,000 members in 170 countries. Its aim is to enable people to become highly qualified so that they can pursue their international careers in accountancy, finance and management.
Anyone who wants to understand the financial standards and regulations or participate in these important international bodies must ‘possess first-rate English language skills and the ability to converse with other accounting and finance professionals’ (University of Cambridge). Being able to communicate with finance professionals in today’s international business environment requires not only excellent skills in business English but the ability to use Financial English.
Someone with excellent Financial English skills will understand the many terms and abbreviations used in the financial sector. Some examples include: ROI (return on investment), EBITDA (earnings before interest, tax, depreciation and amortization) and GAAP (generally accepted accounting principles).
There are also a number of themes which professionals working in finance need to understand such as financial reporting, insurance, investment banking, ethics and professionalism, accounting software, assets and company valuations, and acquisitions and mergers. All of these areas contain lexical fields that need to be mastered by any professional in a finance role.
Behind all of these specialized Financial English terms is the knowledge specific to these financial and accounting areas. Knowing the meaning of the lexical item ‘balance sheet’ for example, without knowing why a balance sheet is important to entrepreneurs will cause significant misunderstanding and failed performance. It might be obvious to most what ‘financial accounting’ means but it is also important to know in what ways this is different from ‘management accounting’.
In addition to these lexical fields, Financial English also encompasses the language required to perform everyday financial tasks. Financial professionals need to possess the linguistic skills to:
- Prepare and deliver presentations
- Take part in discussions
- Participate in and conduct meetings
- Give their opinions and suggest alternatives
- Present an argument and handle questions
- Write financial reports and formal letters
The ability to speak Financial English is no longer a nice to have but it’s a must have for any finance professional working in today’s global world. Whether it’s understanding the specific terminology or international standards, taking part in important financial discussions or writing vital financial reports, finance professionals must have an excellent level of Financial English to succeed in a domain where precision is fundamental.
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