by Donald H Noble
Senior finance leaders need to look beyond solving today's major issues or even what lies ahead in the near-term future. Instead, they need to imagine what finance could look like five years from now. The perception of finance as a risk-averse, cost-conscious team with a back-office mindset will be a thing of the past, with finance defined by a value-focused culture that’s aligned with enterprise purpose.
The future of finance
What might the future look like for financial leaders? Some things are certain: CFOs will likely evolve into chief economic, digital, and investment officers. AI is already redefining the enterprise in finance with robo-advisors and use of self-service to perform more than a million financial tasks a year. As the adoption of AI across the board accelerates, so too will the pressure on CFOs to show a significant change in their organization and their relationship to those at the front lines. Financial technology will begin reshaping finance and human capital — both in the C-suite and on the shop floor. By 2022, technology could add as many as 22 billion new FinTech jobs — up nearly 30 percent from 2017. These jobs will lead to the need for more adaptable leaders with strong digital skills.
Why change is inevitable?
Finance organizations must embrace innovation and future-proof their technology platforms and processes to keep pace with the demands and expectations of the world around them. Our latest KPMG CFO Pulse survey found nearly three-quarters of CFOs worry about the impact digital technologies will have on their company's ability to produce high-quality financial information in the future. Clearly, finance organizations are in need of technology and innovation to stay at the top of their game, but, as if it weren't challenging enough already, they're also grappling with cost-cutting initiatives and changing investor perceptions. CFOs must weigh the future needs of their organizations against the rising costs of finance and technology.
What the future of CFO work looks like after coronavirus
Senior finance leaders need to look beyond solving today's major issues or even what lies ahead in the near-term future. Instead, they need to imagine what finance could look like five years from now. The perception of finance as a risk-averse, cost-conscious team with a back-office mindset will be a thing of the past, with finance defined by a value-focused culture that’s aligned with enterprise purpose. One thing’s for sure: By the end of this century, the latest coronavirus will have been eradicated and people won’t be getting sick anymore. What will finance look like then? We'll find out next week in the final blog post from this special series of blog posts on the future of finance, where we aim to capture the imagination of the CFO community. Click here to continue reading.
Finance's role in driving growth
Financial leaders today have a single-minded focus on achieving growth objectives, delivering new products and services, meeting regulatory requirements, and staying abreast of industry and customer trends. They rely on data-driven approaches to generate actionable insights for decision-making. For example, in the life sciences sector, early market research, data-driven market analysis, robust systems to enable accurate forecasting and currency hedging, and sourcing of alternative procurement options to reduce business risk. All of these work together to generate new business opportunities and value. "What's more, our life sciences clients are constantly looking for ways to improve their capabilities and service offerings.
Finance and leadership
Does the CFO want to reinvent finance for a world where strategic thinking has been transcended by new generations of thinkers? The CFO has a natural influence on the organization's strategic direction and how the organization makes decisions. Emerging business functions, such as marketing, strategy, M&A, and operations, can't provide the same level of insight as to their CFO counterparts and may require additional attention in their search for a finance partner. The CFO's influence should not be weakened by the emergence of these business functions, nor should finance be weakened by a perceived focus on today's problems. The fact is, there are elements of each role that are suited to both traditional finance and non-traditional finance roles.
Donald H Noble is a Partner in the Florida CFO Group.