Finance Function - Trends
Some trends in the finance function within banking organizations or other industries include the changing role of chief financial officer and the shift towards digitization and automation.
CHANGING ROLE OF CHIEF FINANCIAL OFFICER
- As an evolution of the finance function, the role of CFOs is shifting from being a reactive and external change responder to an internal change driver that is spending most of its time (70%) liaising with stakeholders, developing strategy, anticipating trends, and keeping up with competition.
- According to Deloitte Finance 2020 perspectives, "the CFOs are under constant pressure to provide strategic insights to their organizations to help make better decisions." The CFOs and their finance units are delivering data-driven insights to support smarter business decisions and engaging in superior future prospects based on business goals.
- The changing business dynamics has lead to a transformation in the role of CFOs from being a number cruncher to a value driver that is more fundamental to operations, wherein around 41% of them spend their time on activities not related to finance and propelling data-driven decisions throughout the company.
WHY IT IS A TREND
- Indicated by various industry research reports, the changing role of chief financial officer (CFO) is mentioned as a trend in 2020 as it highlights the shift in the dynamics of the roles and responsibilities undertaken by the CFO and is monitored prominently across various industries.
BRANDS MANIFESTING THIS TREND
- Robobank Asia is a leading cooperative bank whose CFO, Niels Boudeling, highlighted the insights on the adaption of the changing landscape of his responsibilities. Today, he is more engaged in facing a changing competitive environment, becoming involved in strategic decision-making, resolving internal conflicts, and long-term value creation via the stimulation of the company to locate brand-new opportunities.
SHIFT TOWARDS DIGITIZATION AND AUTOMATION
- Finance teams are evolving, with more organizations becoming dependent on data-driven decisions, which is compelling the teams to adapt lean models and data analytics for improved customer insights and higher productivity.
- The Deloitte report shows that most of the organizations have implemented integrated ERP systems in their financial systems, along with embracing cloud, which offers highly scalable and quickly deployable services that has improvised the team performance, such as modifying the spreadsheets to high graphical visualization tools for process and analytical tasks.
- Organizations moving towards digitization and automation have made 25% of the finance teams work more efficient, as around 70% of the finance team respondents found that this change leads to remarkable returns on investment.
WHY IT IS A TREND
- Repeated mentions by various industry research reports indicated this as a trend and highlighted the changing mindset of organizations towards digitization and automation and multiple industries adopting the change and implementing it throughout their finance systems for better data-driven analytical decision-making purposes, along with gaining return on investments.
BRANDS MANIFESTING THIS TREND
- A global industrial company (brand name not disclosed) leveraged digital technologies such as Oracle Cloud, along with combining the finance team's internal processes through automation (RPA) technology, which supported in the simplification of the finance function and allowed it to perform with improved effectiveness and efficiency.
- A multinational financial services company in insurance and asset management (brand name not disclosed) generating more than €100 billion in revenue globally resolved its challenge of transforming its finance function by administering an overall digital transformation road map, including deploying a full SAP finance solution, which further assisted it obtaining its ideal finance function.
To obtain the trends in the finance function within banking organizations or other industries, we leveraged credible industry survey reports. Through sources, including Deloitte Finance 2020 Perspectives, EY Survey, McKinsey and others, we found the insights on the trends mentioned repetitively by industry experts relating to the changing role of CFOs and the shift towards digitization and automation. These trends have a considerable impact in the market and represent a modification being adapted by various organizations related to their finance function due to changing business dynamics and to attain a better return on investments.
Furthermore, by exploring various news articles from sources, such as FT, Business Insider, and Biz Journal, and relevant case studies through publications from Oracle, PWC, BCG, and others related to the organizations that are manifesting these trends, we were able to locate the requested details.