The influence of technology on financial services seems to continue apace with the latest insight asserting that CFOs are shifting priorities from cutting costs to rapidly investing in technology and data.
This is according to London-based accounting and consulting firm Grant Thornton’s 2019 CFO Survey, which finds that significant numbers of senior financial executives currently implement technologies such as advanced analytics (38 percent) and machine learning (30 percent).
At the same time, many plan to dedicate additional resources to frontier technologies within two years, including:
- Artificial intelligence (AI) – 41 percent
- Drones and robots – 30 percent
- Blockchain – 40 percent
- Robotic process automation (RPA) – 41 percent.
In addition, financial leaders plan to speed up efforts to implement several popular technologies within the next two years, including optical character recognition (45 percent) and broader distributed ledger technology (44 percent).
Year-on-year comparisons also show that CFOs see exciting changes in technology adoption at their companies:
- 42 percent report that their finance functions regularly make use of advanced and automation technologies in corporate development and strategic planning, compared with 18 percent in Grant Thornton’s 2018 CFO Survey
- 40 percent say their finance function already implements advanced and automation technologies in risk management, up from 20 percent in 2018
- 30 percent use machine learning, compared with just 8 percent in 2018
- 25 percent use AI, up from 7 percent in 2018.
‘Financial leaders must embrace and adapt to new technologies to ensure their organizations operate efficiently,’ says Srikant Sastry, national managing principal of advisory services at Grant Thornton. ‘The speed with which CFOs are investing in IT shows a clear vision of the digital transformation they want to see at their company.
‘But advanced technologies like AI, RPA, drones and robotics require CFOs to focus on specific use cases, workforce preparation and measurements for these technologies to facilitate and maximize a timely return on investment.’
CFO role evolves
CFOs report that they are well positioned to collaborate with IT and ensure digital investments fit into their organization’s innovation strategies: nearly 91 percent of respondents agree or strongly agree it is the CFO’s job to ensure their company fully realizes the benefits of technology investments. An almost identical proportion of respondents (92 percent) believe the finance function of the future must do a better job of leveraging both technology and people.
According to the survey, CFOs see themselves as part of a cross-functional, collaborative team. Of the nearly 400 financial leaders surveyed, 95 percent of respondents say their company’s CFO is a key stakeholder of enterprise transformation planning, while 94 percent report that their company’s CFO actively supports an innovation culture and 90 percent agree the company’s CFO actively shares insights about how to run a lean, efficient function with peers in business units.
Challenges: Skill and collaboration
As CFOs speed toward transformative technology, 60 percent believe the finance function must provide advanced analytical support. The most important skillsets senior financial executives want to develop in the finance function are:
- Data analytics (55 percent),
- Business strategy (40 percent)
- Operations management (35 percent)
- Technology acquisition (33 percent).
Moreover, the survey indicates that financial leaders want to recruit and retain employees who possess traditional financial expertise, while also showing an eagerness to learn new technologies.
‘Over the next two years, talent and skills will be one of the top three challenges the IT function faces as it seeks enterprise growth, along with system complexity and business integration,’ comments Chris Stephenson, business consulting principal at Grant Thornton.
‘As the finance function of the future takes shape, it will demand new skillsets. Leaders will need to move full speed ahead to invest in the right technology and people to transform their business and, ultimately, guide strategic decision-making across their organization.’
Stephenson says this transformation will not end with recruiting and developing employees to have the right set of skills – or with merely implementing the latest technologies.
‘Working more closely with the IT organization can help the CFO rethink end-to-end finance processes. CFOs and CIOs must closely collaborate on digital transformation to remain competitive,’ he concludes.
