Corporate Finance Trends

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Insights and Trends - Corporate Finance

Artificial intelligence combined with machine learning, real-time payments, blockchain as the latest generation technology, and zero-based budgeting are the current trends surrounding the corporate finance industry. Below are details of each of these trends.

Artificial intelligence and machine learning

  • Artificial Intelligence (AI), along with machine learning, continues to play a significant role in corporate performance management (CPM). For instance, predictive analytics rely on algorithmic machine learning.
  • Dorian Selz, the CEO of Squirro, noted that corporate financial institutions are currently using AI methods and supervised machine learning techniques to convert unstructured data to computable, structured data. Out of this data, institutions are able to infer actionable insights, which are later delivered to end users or consumers.
  • It is expected that enterprises will continue to implement more mature solutions, including a major jump in machine learning vendors and the application of big data to existing technologies.
  • WHY SELECTED: This trend has been highlighted by several articles as one of the major disruptions of the current corporate finance industry.

Real-time payments

  • Today, US corporate finance industry is streamlining financial processes with real-time payments services. In a study conducted by Capgemini, 42% of corporate finance and treasury respondents suggest that real-time payments will continue to have a great impact on the industry for positive change.
  • The Deutsche Bank recently predicted the rising recognition of real-time payments by corporate financial industry across the globe. According to the bank, banks and corporations will be forced to accurately forecast liquidity management needs as a result of real-time transactions.
  • WHY SELECTED: This trend has been highlighted by several articles as one of the major influencing trends in the corporate finance industry.

Blockchain as the latest generation technology

  • Due to the rising trend of finance automation by financial institutions, many corporations are inspired to use more experimental technologies like blockchain. While many applications for blockchain were observed in 2018, more are expected to rise significantly in the coming years.
  • Several financial institutions are already experimenting with blockchain technology, including the Big Four accounting companies. IBM, for instance, built an experimental blockchain-driven program for the elimination of multiple data storage systems and to enhance transparency.
  • WHY SELECTED: While Global Newswire outlined latest-generation technologies as major trends in corporate finance, this trend was identified as the most adopted technology in the industry.

Zero-based Budgeting

  • The corporate finance industry has embraced the zero-based budgeting (ZBB) ideology, a concept that was introduced in the 1970s to ensure corporate leanness. Big corporations in the industry, including Boston Scientific, have adopted the ZBB system, which ensures that expenses for every budget are justified.
  • McKinsey and Company recently proposed the key factors that ensure successful implementation of ZBB approach, including planning for continued oversight, cost drivers, ownership division, quantifiable means of measuring success, and corporate financial attitude change.
  • According to Brian Kalish, an expert in financial planning and analysis and owner of Kalish Consulting, ZBB will take the corporate finance industry back in the coming years. It is predicted that the concept will be adopted to measure spending trends and outcomes.
  • WHY SELECTED: This trend has been highlighted by several articles as one of the major disruptions of the current corporate finance industry.

YOUR TEAM APPLIED THE FOLLOWING RESEARCH STRATEGY

In order to identify four to five current topics or trends surrounding corporate finance with a focus on banking and financial institutions, commercial finance, and healthcare finance, we began by researching credible market research reports such as Market and Market Research, PR Newswire, Globe Newswire, and other similar sites addressing corporate finance industry trends. Through this strategy, we found market reports that listed the top three trends in the current corporate finance industry, including latest-generation technologies, near-term priorities, and machine learning & artificial intelligence. Since the latest technologies and near-term priorities are broad trends, we looked for credible online sources that outline trends in the industry under these categories. We were able to identify three more trends: first is blockchain as the latest generation technology and the second and third are real-time payments and zero-based budgeting, which are near-term priorities considered by the industry. Since these trends were mentioned by multiple sources, we concluded that they are the current trends surrounding corporate finance.
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