Digital transformation has accelerated in many businesses this year and as a result, the demand for finance professionals with data analytical skills has never been higher.

The Future of Jobs Report 2020 created by the World Economic Forum (WEF) investigates how automation, in collaboration with the impacts of the Covid-19 recession has generated an even more disruptive outcome. The report suggests that there is likely to be a significant change in jobs, duties and skills within the next few years, with finance, accounting and auditing being areas likely to be impacted and data analytics and data science considered the high growth markets.

The trend identified in the report is supported by recent figures in the finance and accounting industry and a shift in roles towards digital and technical duties in response to the pandemic. The demand for upskilling has become even more important, and in the case of finance, this translates into a greater focus on business planning and analysis. This change comes with a need to enhance digital skills in business, with the report suggesting that 2 in 5 business leaders are committed to accelerating digital transformation plans. A separate study by EY discovered similar findings, suggesting that nearly 60% of all respondents believed predictive and prescriptive analytical skills were critical.

With digital transformation plans accelerating, the data available to support the decision-making process is increasing. The finance industry needs to be capable of utilising this data to support its own individual decision-making plans. 

The situation, however, is that the skills currently aren’t’ there to meet the rising demand. Consultancy business McKinsey states that under 20% of businesses believe they have the necessary skills and experience to gather and utilise the insights effectively. A further 80% of respondents interviewed by McKinsey said they did not have the confidence in their data insight processes and their positive impact on business sales.

There generally tends to be a lack of knowledge surrounding the potential of data. Businesses may have more data availability than ever before, but most don’t really know what the data is or what it could actually enable them to do.

Data analytics professionals within finance can support businesses in effectively using the data. These individuals have certain skills that enable them to respond to certain information points and make informed decisions. Insights can only be delivered if there is a clear understanding of the business and what the data is telling you. Individuals need to be capable of connecting data analytics to the overall strategy and business objectives.

McKinsey describes the importance of data translators, people capable of defining data insights, drawing information from the data and converting this information into clear, actionable language that can be applied within the business. Once data is generated into insights, this information needs to be transferred into messages and offers that can be delivered into the wider business and industry.

 

Finance professionals have generally been responsible for gathering financial information and presenting it to other individuals in their business. The key difference today is the sheer scale and range of data available from multiple sources. This is a challenge in itself, but it also offers the opportunity to add even more value to a business.

Data analytics involves harnessing skills in both technical and non-technical fields. The collection and assessment of detailed data also create new ethical factors that finance professionals will need to consider. Aside from efficiently extracting, measuring and analysing data, finance professionals need to understand the ethical implications of this entire process.

Industry experts believe that digitisation will generate automation further into traditional finance and accountancy roles. The need for finance professionals capable of interpreting data and delivering clear decisions based on data-driven insights is likely to continue to grow. The world is evolving, business is changing and finance professionals will need to change too.

The financial industry is experiencing a significant shift driven by new technologies. Many business leaders are continuously looking for techniques to improve their performance and introduce new, efficient solutions. With the rise of new technology comes new challenges for the finance industry.

Being prepared for cyberattacks

Financial businesses are particularly vulnerable to cyber attacks due to containing large volumes of very sensitive customer information. As one report shows, financial businesses are generally liable to cyberattacks more so than other industries. Compromised credit cards, leaked information or malicious banking processes have forced businesses to utilise and embrace new technologies and protect their organisation from very expensive challenges. 

By implementing advanced technologies businesses can greatly improve their security measures and greatly reduce potential cyber-attacks and the associated expenses. Security represents a top priority for financial businesses due to the accelerated rise of professional ‘attacks’ in the last couple of years. Business can utilise new verification services, a fraud prevention system that verifies user information. End-to-end encryption enables no external group to access certain sensitive information. 

Maintaining a connection with new technology

Recent studies suggest that financial businesses need to continue investing in robotics and other automation tools to enhance their effectiveness and reduce costs linked with operational processes, risk management and compliance. Businesses need to upgrade their internal systems and data facilities to utilise the benefits of big data solutions, such as AI-focused support assistants. 

Exploring robotics can allow financial industry businesses to replace traditional, manual services with automated processes, improving productivity, accuracy and compliance. Businesses need to be prepared to embrace new technologies such as robotics and artificial intelligence, machine learning and NLP.

Keeping your business compliant

REgulations, compliance and laws are a constant challenge for the financial industry. The pressure to remain authorised and compliant relates specifically to the rising regulation fees that emerged from the global financial crisis back in 2008. Today, multiple regulations have driven financial businesses to streamline their processes.

Implementing regulatory technology to stay compliant enables businesses an efficient management and risk assessment process for organisations. RegTech is generating added value for a company seeking to streamline processes associated with regulatory compliance. RegTech businesses provide ‘know your client’ and anti-fraud services, tax data management services, real-time reporting and regulatory compliance assessment tools.

The challenge of meeting customer expectations

Today’s customer is tech-savvy and generally expects high-level custom features within their banking services. Younger customers typically have a better understanding of technology and as a consequence have higher expectations of their digital experience.

Generation Y, people that fall between the ages of 22 to 38 are responsible for nearly 50% of mobile banking users and have the biggest impact on the digitisation of financial services. To be capable of meeting the needs of both the older and younger customers simultaneously, financial organisations need to create a hybrid banking model that combines digital experiences into a traditional banking environment.

Financial businesses can continue to succeed and have a considerable advantage over their competitors if they continue to embrace digital technology. With a combination of AI, robotics and regulatory technology, businesses can continue to innovate and manage the challenges faced in finance, while continuing to remain compliant and keep progressing.

A final factor is maintaining a close consideration of customer satisfaction. To maintain the highest level of customer satisfaction, financial businesses need to incorporate a blend of traditional and digital banking methods. The combination of the solutions described will enable finance businesses to reach their future goals.

The chief financial officer has always played an important part in business, but the impacts of the pandemic have heightened the importance of this position in an organisation. 

While technology and new developments have enabled businesses to adapt and innovate, many businesses continue to use traditional methods to collect and store their data. As a result, this can create a level of disconnection and lead to potential inconsistencies with information. With the significant pressure, competition and rising challenges associated with the pandemic, it has become even more critical for all members of a business to show their value and the potential for CFOs to add even further value is still there. Business leaders are expecting more from a CFO, expecting individuals to provide more insights, advice and strategies for their business. This is exactly why the role of a CFO is perfectly positioned to take full advantage of the data business intelligence can provide.

BI first really emerged back in the 60s as a method of information sharing within a business, but the rise of new technology completely transformed this sector. The rise of big data has enhanced industries even further and today’s BI industry encompasses a much more comprehensive list of markets, including data mining, reporting, preparations and statistical analysis.

No matter what industry or what service you provide, a business will generate some form of data. BI generates a detailed understanding of data within a business and harnesses this information to create opportunities to implement changes that improve efficiency and business success.

How finance can drive change

The finance section of a business can drive significant change in an organisation. The combination of a CFO with business intelligence creates an ideal match for enhancing and taking a business to a higher level.

As a CFO, business intelligence provides a way of increasing value by generating quality data and understanding how to apply this to your business. A strong relationship between BI and finance enables a CFO to implement effective data collection and elevate their position beyond a conventional CFO to more of a strategic advisor. 

How Business Intelligence can enhance the position of the CFO

A BI team isn’t focused simply on data analysis or data interpretation. Instead, the primary aim is on gathering as much data as possible in a completely impartial manner. The unbiased approach towards data collection is vital to an organisation.

If data is collected by an individual with their motivations it can result in generating findings that support a concept they were trying to highlight. This can happen subconsciously through what is regarded as confirmation bias.

When the CFO accepts the data, this presents added credibility to this information. Approval by the CFO creates a positive sign of reliability to the organisation and assurance to other business leaders. The information generated with business intelligence is impartial, scientific and fact-based.

By enabling a BI team to gather the data, the finance department can then spend its energy on data analysis, rather than data collection. Uninfluenced by certain goals and motivations, the BI department can present the information to the business in a completely transparent manner.

Gathering more data

Having a wider understanding and more data available is very important when making business decisions. The challenge for businesses, however, is that more data generally presents more confusion and can be quite overwhelming to manage. A dedicated BI team will collect data from a range of sources and bring it together to make it more manageable. If the CFO works with BI, it enables a clearer understanding of how data can be used in the finance department and an insight into the value of this information.

This process enables businesses to explore combining data from other sources to support further decision making and so instead of having several separate data sources, all sources can be combined and used together. Without the support of BI specialists, it can be challenging to manage and understand this volume of data types and often result in the business missing vital insights.

Clear data definition

When the BI team defines the data, it is identifying that the data means to allow the information to be used more effectively. Without implementing these definitions, that data can lack real meaning and can result in various teams interpreting the details in their way, leading to many confusions.

It is critical for definitions to be consistent throughout the business and for there to be a singular voice of truth. Without really understanding what the data means, it is difficult to use it effectively and if individual teams create their interpretations then it can lead to several misunderstandings within a business.

Once this has been solved, a business is in a stronger position to implement a company-wide definition of the core KPIs and the data can be used effectively for decision-making, planning and budgeting.

Enable informed decisions in a business

One of the most important roles of BI is creating information and context, enabling a CFO to generate intelligent and informed decisions. Without this level of detail, the plans used to run a business are no more than guesses. If for example, a business is trying to determine whether to invest in additional marketing resources to retain existing customers or to put the money towards marketing to new customers. This is a scenario that requires clear data and cannot be determined on general assumptions. If the business operates in the SaaS market there are several things to consider: how to define the data that relates to your vital customer metrics, how much it costs to market to existing clients and retrigger activity, how much will it cost to bring a new customer onboard and how much does a typical existing customer spend in comparison to a new customer?

This level of detail provides a good context for the final decision. These findings are based on facts and numbers, rather than adopting an approach based on an inclination or a method that has been done repeatedly within a business.

Identifying potential weaknesses in a business

Taking a step back and assessing information from a wider perspective enables BI teams to identify potential issues that may be overlooked internally.

There is a possibility there are weaknesses in a business that may not be visible from the existing reporting structure. The accurate and comprehensive data collected by BI professionals enables the opportunity to identify missing, incomplete and inconsistent data and can allow a business to explore potential weaknesses in certain controls and processes.

Trend prediction

An efficient CFO will look beyond previous data trends. They will explore and make predictions about future trends and make the necessary preparations. Instead of applying tried and tested approaches to forecasting, data BI will enable CFOs to use intelligent techniques to make predictions for the future of a business and deliver clear plans.

With the right data in place, a business can make intelligent informed decisions and be ahead of the curve. Many businesses rely on a reactive approach and as a result, lose their competitive edge. BI professionals enable a business to maintain momentum with new developments and monitor market changes and their impact on customer demands. 

Equipped with the necessary information, decision-makers can act effectively and in a manner to enhance business success.

Leading members of the finance industry explain how businesses can transform and maintain performance levels through the pandemic. Financial leaders are playing a vital role in managing businesses through the pandemic and associated economic challenges. A recent study by CFO Research combined with FTI Consulting interviewed 325 chief financial officers and senior executives to get a better understanding of how finance is supporting and driving business value. The results presented five core themes:- 

-The work of CFO’s during the pandemic has shown what impact financial leaders can have on the wider business strategy. Covid-19 has emphasised the ability of financial leaders to manage what is often an overlooked part of a business: corporate scenario planning. 

-With significant changes to the economy, CFOs have managed to maintain productivity via remote teams. The survey indicated that over 70% of finance professionals worked in a remote workforce model. 

-continues to progress and while many CFOs are adapting and utilising automation tools, the survey indicated that automation is yet to reach its full potential in many businesses. The general corporate finance service delivery model is transforming. Over 40% of the respondents stated that their finance work was performed by a shared services organisation, nearly 50% said they used business process outsourcing or alternative hybrid models. Looking to the future, CFO’s are in a position to manage lead strategies and value development of a business. Finance has the capability of delivering insights on predictable measures in a volatile market, a vital asset in helping a business determine the cost, risk, working capital and overall capital structure. 

CFOs transforming into strategic leaders During the pandemic, CFOs have demonstrated the potential to generate models based on various scenarios, the ability to transform, make informed decisions and most importantly, lead their business through the pandemic. Respondents of the survey indicated that finance executives view their CFOs as vital members of strategic leadership, planning, analysis, technology and automation and detecting risks. Approximately 90% of respondents indicated that their CFO’s core functions include:-

Overwhelmingly, the surveyed finance executives portrayed their chief financial officers and finance teams as rising to the task across the domains of strategic leadership, planning and analysis, use of technology and automation, and identifying risks. More than nine out of every 10 of the survey respondents said their CFO and finance functions: 

-Important roles in guiding the overall strategy, making key operational decisions and supporting enterprise values across the entire business. 

-Driving value by detecting areas and leading plans to reduce and optimise business costs. 

-Applying innovative technologies i.e. predictive analytics and automation to generate accurate and relevant information. 

Remote working 

As with all business leaders, CFOs needed to adapt to remote working conditions, the cultural changes and the overall talent challenges. The survey findings suggested that CFOs were well prepared with automated-driven tools and were capable of responding quickly to specific priorities, processes and the preservation of talent and culture in the business. 

The main priority for CFOs in regards to the pandemic was enabling a remote workforce, according to the survey results. Over 40% of the respondents stated that finance teams adopted a remote working system, with nearly 30% transitioning to predominantly working remotely. The challenges from this transformation included the implications on cost management, financial planning, analysis, budgeting and forecasting (40%). Over 40% of the respondents claimed that risk management, working capital management, adopting new technology, and accounting and financial reporting were largely impacted. 

Automated Technology CFOs have progressed in regards to applying robotic process automation to specific finance functions, but there are still opportunities to enhance this further. Most CFOs have adopted automation to a certain level, with nearly 80% of the respondents indicating that at least one of the members of their finance team was ‘virtual’ i.e. they were using RPA and other automation tools. The survey findings indicated that for smaller businesses, the number of virtual workers was significantly smaller, suggesting that automation hasn’t reached its full potential in many businesses. Over 50% of finance executives indicated that eliminating and automating manual tasks was a top priority. Cost containment continues to be a key concern for CFOs. Over 30% of respondents stated that they intended to increase the use of captive shared services, BPO, GBS or an alternative hybrid model to utilise cost models during a disruptive business environment. For many senior finance executives, the CFO is regarded as a finance and accounting leader. The survey highlighted that finance professionals also regard CFOs as a business leader, value creator and someone who drives efficiency and effectiveness within a business. Nearly 90% of the respondents indicated that the CFO had the talent and expertise to enhance enterprise value for the business. In the short term, CFOs have proven how a business can survive during the initial phases of the pandemic. In regards to the long term, CFOs will examine initiatives that focus on cost savings. Finance executives believe that improving planning, scenario modelling and forecasting are top priorities for CFOs over the coming year or so. To achieve these strategic goals, over 80% of the respondents believed this required evaluating, implementing or focusing on existing planning, forecasting and budgeting technologies.

In the finance world, legacy systems have represented the foundation that has maintained a business in its traditional activities. Making the decision to move away from legacy systems can be complicated, from a technical and business culture perspective. Many analysts believe that while it may be a challenging move, it is something that must be faced, particularly at a time when organisations are accelerating their business transformation plans.

There is a range of complexities that need to be considered with this move away from legacy systems. From a technical point of view, it can be difficult to extract data from traditional systems and the associated applications that are operated on these facilities. CIOs emphasise the complicated dependencies that have grown over the years as a consequence of implementing a number of various databases and other systems. Nevertheless, ignoring the problem will result in gathering additional IT technology issues for the future, especially as businesses actively seek to find talent to manage the older systems.

Agile and flexible platforms, equipped with data-focused business models and lower overheads are positioning themselves to challenge the traditional corporate models. The financial industry is highly competitive and businesses need to utilise every possible part of agility and information they have to compete with other names, as well as newcomers to the marketplace. There are a number of new organisations capable of disrupting the financial industry. For those companies that contain high volumes of data and lack the modernised approach, there is a likelihood that they lack the ability to assess all their data and respond effectively to new demands and changes in the market.

Innovative business leaders in the finance world understand this challenge but may be struggling to implement the required changes. As a consequence, a business experience considerable fragmentation of their data across various platforms. Many CIOs are making the move to the cloud to attempt to improve the situation, but issues of data fragmentation can continue. While there are multiple benefits in moving to the cloud, many businesses experienced data fragmentation across clouds, making the overall situation actually worse. Fragmentation results in less secure data and the potential for infrastructure costs to spiral.

Taking a more modern approach to data management

The solution to all of this lies in taking a more modern approach to data management. Financial industry businesses to utilise a more software-focused platform approach to managing their data. This will focus on consolidating and managing workloads and data through one singular system. 

FInancial businesses should explore other opportunities to enhance compliance through utilising applications that are located on the platform. These applications measure personal data and play an equally important role in data governance. Businesses can also introduce other applications to improve security or use analytical systems to enhance the overall customer experience. Applying these techniques can help businesses stand from newcomers to the market that is not hindered by legacy systems but lack the volume of data and customer bases.

The financial market is relatively unique in that it still consists of businesses that have existed for many years. However, in order for these traditional companies to survive, they will have to adapt and modernise. The first place to focus on, and probably the most valuable resource they contain is their data.

The significant rise of data has created a number of new opportunities and as a result, the role of finance professionals is expected to change. In order for the industry to be continually viewed as a value-added service, finance professionals must continue to change and maintain pace with changing technologies. Laura Timms, representative of MHR Analytics highlights a number of significant changes we are likely to see in the years to come.

Rise of business consultancy in finance
Finance professionals have conventionally had to rely on historical data to generate insights. This technique created certain limitations and lacked a clear insight into how our decisions would shape the future. Predictive analytics has enabled finance teams analysis to progress from a stage of asking ‘why did it happen’ to focusing on ‘what will happen next’? The availability of richer insights has allowed finance professionals to monitor customer information in real-time and progress further than just maintaining records to deliver in-depth data analysis. The role of finance professionals has progressed beyond the days of working on numbers in the background. The future of the finance role is likely to see more individuals using new systems and analytics to position themselves in a more strategic and stronger position within a business. The power of information will enable finance teams to measure and interpret anomalies and patterns within a business. This information can be communicated within internal management to enable important decisions to be made.

Remote Working
The rise of cloud computing has significantly transformed opportunities for finance professionals. Traditionally fixed to the office space, the cloud has enabled more flexible working and remote work opportunities, creating a number of benefits for employees and further cost savings for businesses. Further security within cloud systems will allow finance teams to measure and share insights from any location without having concerns about handling sensitive information outside of core office locations. In the not so distant future, finance teams will be capable of sharing and analysing information with their colleagues simply by clicking a button and generating a real-time portrayal of business activities to multiple locations.

Implementing Non-Financial Data
For years, financial data has been the core focus of finance activities. This represented the data where patterns were identified, reports were generated and general observations were made. In reality, financial data only represents one part of a business. As data availability continues to rise, there will continue to be other sources of information capable of using to expand on financial data. For example, customer data on behaviour patterns can be used to identify fraud and suspicious activities. Finance professionals can use other data sources such as employee performance data to assess the ROI that each individual can provide for a business.

Implementing this type of data into the general assessment of business supports revenue generation and provides greater value for financial information. Studies have proven that finance teams that use non-financial data sources with their standard financial data are able to create forecasts with accuracy levels exceeding 90%.

High standard of service
The continued rise of data analytics is enabling an augmented work environment, enabling simpler tasks to be completed by machines rather than people. Augmented analytics will enable many administrative duties that have traditionally been part of a financial position to be replaced and swapped for other important duties, creating a more efficient way of working. This will enable finance professionals to work closely with data, generate leads and insights for their business. Data will leverage the skills of finance teams, allowing them to focus on creating a high-value service. Overall, data analytics will enhance industry performance, with both businesses and clients recognising the influence these roles can have on business profits.

Developing data-focused positions
Augmenting traditional positions will lead to the creation of data-focused alternatives to conventional bookkeeping and accounting jobs. As data becomes more important and embedded in finance, businesses will become even more reliant on financial insights to improve their strategy and the relationship between finance and data will become even more clear.

In the future, most finance professionals are likely to require to have some understanding of data analytics. Before this transition occurs, we will likely experience a rise in data science roles, created out of demand for data specialists in the business. Finance professionals that are training to become more skilled in data analytics are likely to be the type of talent in demand over the next few years.