CFOs and other financial professionals are fairly optimistic that we are approaching an economic recovery. Over 70% anticipate that we will return to normal by the end of the year, according to the latest Enterprise Financial Decision-Making report from OneStream, a leading provider of corporate performance management solutions. The report suggests that businesses have increased their investment into data analysis tools and general usage considerably over the last year.

The study by OneStream explored financial leaders across North America and determined certain factors that influenced their priorities, budgets and technology integration plans for this year. The findings suggested that the pandemic had generated a bigger need for flexible forecasting, predictive planning and digital transformation. The capability to forecast budgets quickly and change workflows have become a critical feature since the pandemic began.

The report also discovered that financial executives have significantly increased their usage and investment in data analysis tools. Businesses generally tend to invest in artificial intelligence and the results showed increased use of cloud-based planning and reporting solutions. Most businesses (around 70%) are already using or plan to adopt (20%) a low-code development platform that allows business users and developers to adopt new roles while managing complex coding requirements.

In the case of return-to-office budgets, data privacy tools are regarded as the most common priority, followed by hybrid cloud solutions.
In comparison, the OneStream 2020 Enterprise Financial Decision-Making Report indicated that less than half of finance executives used cloud-based solutions regularly for reporting. The 2020 report also showed that less than a quarter used machine learning and artificial intelligence solutions.

Many financial leaders are exploring their workforce, technology and supply chain requirements in a post-pandemic world. However, the influence of changing policies and social development has had a significant impact on investment plans, encouraging leaders to focus on sustainability and diversity measures as well.

The study was conducted by Hanover Research this year covering hundreds of financial decision-makers in Northern America. The full OneStream Report – Enterprise Financial Decision-Making 2021 – North America can be viewed here.

Businesses today are becoming more and more reliant on data and fortunately, the availability of data is rising considerably. The amount of information generated by one business would have simply overwhelmed some of the largest companies from a decade or so ago. 

Yet, the majority of people in recent studies confirm they continue to find the volume of data too much at a certain time, while another 45% from the recent State of Growth report stated that the lack of data represents one of the biggest challenges in business.

How can the finance industry work through this balancing act of remaining in control of their data and satisfied with the volume and quality of information they have available?

Enterprise Resource Planning (ERP) systems have become a vital tool for the management and organisation of business data. While each team may only require access to a certain portion of the data, combining it all within one system creates a much clear and effective view of the entire business. There are certain considerations to think about for financial analytics and successful reporting.

Are the tools you use suitable for your business?

Spreadsheets are popular reporting options due to their simplicity but they have their limitations. Working with conventional spreadsheets can result in errors, often due to calculating formulas incorrectly. To create a higher level of accuracy, information needs to be constantly updated, which makes it complicated to maintain this level of data quality. 

How accessible is your data?

Combining various data sets in different ways is one of the biggest benefits of applying the right tools to your business. This could be combining financial, production and other data to determine the production costs of a selected product in two varying locations. This level of data wouldn’t be achievable if the business is using varied systems or spreadsheets, or possibly the incorrect ERP system. Utilising an ERP system with a singular database makes it simpler to create centralized access to the information across the business. If data is being captured in this manner, it becomes easily available for various teams to assess and generate new insights.

Are the reports flexible?

ERP and finance software providers generally provide a range of pre-formatted reporting templates that can be applied to standard reports. This reduces time and money spent by eliminating the need to generate frequently used reports. The problem is that one format won’t necessarily work for another. Using predefined reports can be useful but many financial reports need to be customised to present data in other ways for different clients. Often, altering the layout or incorporating new data into an existing report can be complicated and time-consuming.

Are there restrictions with your KPI monitoring?

KPIs allow business leaders to understand how well their team is performing against certain objectives and enable businesses to focus on reaching specific targets. Most software solutions are embedded with built-in KPIs but to be effective these KPIs must correspond with the correct business model. No two businesses are the same and some software providers do not appreciate this, assuming that several standard KPIs are all that business requires. 

Can dashboards be customised?

Associated with the KPIs are dashboards, which are an important element in providing visibility into goals for a business. In addition to displaying KPIs, they can support individuals to remain focused on their work, keeping them alert to potential issues that need to be addressed or certain jobs that need completing.

To grasp the full potential of data, businesses need analytics that truly add value to your business and reporting that is insightful. While many software providers offer various tools, not all systems are equal. Selecting the incorrect solution that has irrelevant data can limit the ability of a business to take full advantage of its information. Selecting the best solution will generate a higher level of flexibility and confidence that the right information is being channelled to the appropriate people at the right time.

Allen Shim became the CFO of Slack after shifting his attention towards what priorities the position needed. 

Back in 2014, Slack had around 20 employees when Shim joined as a finance executive. He quickly became responsible for managing finance, analytics, accounting, as well as other functions within HR, IT and legal.

In a previous interview, Shim explained that he felt like he had the responsibility of a CFO but it wasn’t until he stopped wanting the job that he began to understand how he had been limiting himself through certain actions.

After experiencing a complete review in 2017 one thing stood out to Shim and that was that his fixation on becoming a CFO was hindering his overall effectiveness. Taking this on board, Shim reconsidered his performance and understood that rather than focusing on his achievements, it was more important to determine whether he was the one capable of driving this business forward. It was this shift in mindset and how he interpreted his personal development over time that was so critical.

After further discussions with other CEOs, Shim reassessed his organisation and quickly realised that he was overseeing multiple functions. As a consequence, Shim was spreading himself too thin and incapable of allocating enough time to each task required to be an effective CFO.

Shim highlights that to become a CFO, he was required to become excellent in financial planning and analysis (FPA) and appreciate exactly what factors would drive the business forward. Shim started focusing more on the way a CFO could create a structure in the business, supporting scale and growth over time. 

The shift in mindset enabled him to apply more energy towards business strategy and ironically ended up with him being offered the role of the CFO later that year. The change in focus on career advancement ultimately enabled him to progress in a way that facilitated the goals of becoming a CFO.

The last year came with several uncertainties, exposing vulnerabilities in society and transforming how we do business. With the disruption to face-to-face services, the finance industry was forced to explore alternative, innovative ways to reach out and connect with customers.
Shifting from face-to-face services to alternative plans isn’t easy. Apart from the potential risk of losing existing customers, there are the added worries of complying with certain procedures and ensuring the service offered works for your users. With this in mind, several key challenges are facing the financial technology industry:

The shift in finance – the traditional finance industry has shifted dramatically as a consequence of the pandemic. In 2020, over 3,300 physical banks closed their doors in the United States. At the same time, we have witnessed a surge in challenger banks. At the beginning of 2020, only 4% of millennials and Gen Zs were prepared to use a challenger bank account as a primary one. By the end of 2020, this figure increased to 15%.

For financial providers, this means they will need to adapt and be prepared for a more diverse audience. Gone are the days of providing a one-size-fits-all solution. Instead, industry demand suggests that customers require bespoke services. One area to focus on is utilising technology solutions like big data and automation to ensure the services meet customer demands.

As the conventional banking industry changes, emerging industries like cryptocurrency are transforming too. Earlier this year witnessed a significant rise in bitcoin prices and other altcoins. The crypto industry is closely affiliated with blockchain technology and it is in this area where we may witness more changes. From smart contracts to trades, blockchain can offer security to traditional financial services and alternative markets. Reports suggest that by 2030, blockchain will impact global GDP in big ways.

At the same time regulators worldwide are focusing on new legislative solutions to make the financial industry more secure and create legislation for anti-money laundering in regards to blockchain assets. For financial solutions providers, this is the time to explore how services and technologies like this impact their industry and how to work with them in the future.

The Lending industry

At the beginning of the pandemic, many people experienced a financially unstable situation due to loss of employment, furlough or health-related issues. With a continued rise in online services and restrictions easing across the world, there has been an impact on the lending market. For customers, this could involve a shift from desire-focused lending to more needs-focused lending. This shift is associated with a decline in credit card searches and an increase in purchase finance and commercial lending, indicating borrowers are becoming more cautious and selective in their choosing loans and providers.

For traditional and alternative providers, a similar lesson resonates. It is important to consider the changing needs within the consumer market. Whether this translates into creating a smarter, more customer option or transferring to a digital platform, each service will vary. Whichever service you choose, it is essential to find one that works for your clients.

Today, the finance industry is in a transformation stage. Many traditional processes have been proven not to be as efficient or as reliable as previously thought, and the concept of how finance and lending have been changed significantly. The industry is still reshaping for the future and while it still isn’t completely clear what shape the industry will take, it is likely to be focused largely on data, new technology and prioritising the needs of customers.

Oracle has expanded its relationship with the UK Government by enhancing the Government Centre of Excellence and enabling better access to Oracle Cloud. Oracle has updated its links with the Government by updating the existing Memorandum of Understanding (MOU) between Crown Commercial Service (CCS) and Oracle, as well as focusing on building a stronger working relationship between Oracle and the UK public sector. 

The Oracle Centre of Excellence will provide further support and technical capabilities enabling the UK Government to make more use of Oracle Cloud. The updated MOU will ensure governments and the public service sector will have continued use of Oracle Cloud. Critical services will have complete access to the full range of cloud applications, infrastructure services and autonomous technologies. 

Oracle Cloud will support customers like the UK Government in delivering higher efficiency, automation and productivity, all important factors in supporting a successful economic recovery. The services will provide public sector organisations with further support in shifting workloads to Oracle Cloud Infrastructure or expanding the use of the Oracle Cloud Applications Suite. 

Philip Orumwense, commercial director and chief technology officer of Crown Commercial Service explains that the enhanced MOU will continue to create savings and further benefits for public sector customers using Oracle’s cloud-based technologies. Orumwense highlights that the services will create more value while supporting public sector customers’ journey to the cloud. 

Gareth Rhys Williams, the Chief Commercial Officer explains that the UK is committed to the Build Back Better growth plan, a part of which involves ensuring we make the most effective use of modern cloud technologies. Extending the relationship with Oracle will enable the UK to continue generating commercial value, enhance services delivery and support the wider agenda of the Government. 

Richard Petley, MD and Senior Vice President of Technology and Cloud at Oracle explain that the announcement confirms the commitment and long-standing relationships between their business and the UK Government. Petley highlights that the collaboration enables the potential of the cloud to support the UK is leading the way in adopting digital technologies. 

Oracle provides the only multi-region cloud for use by public sector customers in the UK and can be used by multiple groups such as the Home Office, the NHS and the Ministry of Defence. The revised MOU builds on these relationships and will enable public sector group to use cloud technologies to deliver the most effective public services and greater value to the customer.

People are beginning to adapt to AI at a steadily rising rate. It’s clear that modern technology is evolving rapidly and has had some impact on nearly everyone’s lives.

AI has become profoundly popular in multiple industries for a range of reasons. Improving efficiency, managing information, identifying trends in data are a few of the reasons why AI has grown so significantly in recent years.

The finance industry is a particularly important area that needs to be capable of adapting to meet the needs of their customers. The conventional ways of managing customers don’t necessarily work as well today. 

In the case of the finance industry, AI and Machine Learning have various applications. Chatbots, robotic process automation are good examples of AI applications in finance. Global studies have indicated that applying AI could save the finance industry over $440 billion by 2023. Many industry leaders are questioning how exactly AI can transform the finance industry and support the global economy.

Risk Assessment 

AI in finance is being utilised for maintaining important business records, in the case of finance, this could be information such as credit scores. Before customers are offered a credit card, a finance company will check multiple records, loans etc and use this data to adjust the interest rate applied to the card offers. 

This process is complex and involves multiple record checks but AI is capable of doing this work quickly by utilising data and then recommending the right product and interest rate for each customer. Human-based analysis may include errors that can result in potential costs to finance the business. AI memory is developed on Machine Learning, eliminating the margin of error.

Customer Support

Many finance businesses have launched chatbots on their websites. A chatbot managed and integrated by an AI development business is capable of interacting directly with customers and answering specific questions. This saves time and more importantly money for the business.

Detecting and Managing Fraud

The primary goal for most businesses is reducing risk, and this is particularly true in the world of finance. There has been a rising number of security breaches and scams in the finance industry and so customers are more cautious about their money. Many financial institutions have implemented AI services to detect cases of potential fraud. AI tools are capable of detecting fraud through analysis of one transaction activity. They can detect fraud by monitoring unusual transactions and location changes. With the support of AI, it is becoming more difficult for hackers and fraudsters to complete these activities.

Finance Advisory Services

Machines can apply bionic advisory tools which provide an efficient and accurate service, but industry experts believe a combination of these tools with the human mind generates the highest results. While these new technology tools can generate efficient results, they do require human intervention to generate the most success.

Financial Trading

Understanding future trends in finance are challenging and so many investment businesses use AI to generate a clearer understanding of future patterns. Machines are particularly useful in managing large volumes of data in a short period. They also can assess financial changes and detect certain flaws in a system and offer solutions. 

AI is continuing to make steady progress in the finance industry and judging by the pace of change, it will have a significant impact on the employee structure in certain roles in finance. Ultimately AI can greatly reduce the potential challenges in finance and lessen the potential of security breaches. Customers can be given better services, enhanced support and opportunities for smarter trading.

The role of a CFO has transformed in recent years, going well beyond its conventional function to more of a pivotal role in engaging, communicating and influencing overall value for a business.

Finance professionals today need to be capable of telling their own story, representing themselves as vital decision-makers on specific issues ranging from ESG to how to best leverage Big Data. The role of the finance professional has significantly changed, thanks partly to the automation of many standard tasks and the focus on how the finance role can influence overall business strategy. Finance is far more than just looking at numbers and has a profound impact on key decisions. Gaining support from the business is critical and so is capable of delivering effective stories defining the problem and solutions for improvements are an important element.

Finance teams are often being approached from other sides of the business, such as corporate sustainability to support collaborative teams capable of meeting the ESG demands. In today’s world, we are finally recognising how precious nature is and that our commodities are finite. Focusing on development must be partnered with understanding and measuring what these actions have on protecting our wider and future interest. Finance professionals are well-positioned to manage and provide teams with the information needed on important issues such as ESG.

In today’s data-driven world, many businesses struggle to manage their data and how to use it to make strategic decisions. Increasingly, finance professionals are being asked to collaborate with data scientists and others focusing on extracting insights from big data. There is an emerging trend of finance professionals collaborating with other teams and harnessing their skills in various ways. Finance people can play a pivotal part in the Information Age. They have experience with data and bring with this their advisory knowledge and strategic position to manage these responsibilities.

We are well into the era of big data and in every business and every finance team, people have the opportunity to work with data. Finance professionals have the power to inform, guide and lead their business. Many CFOs will have the responsibility for possibly the majority of data transformations in a business.

Forward-thinking financial businesses are applying data, analytics and AI to create new products and services and to enable the delivery of more intuitive and personalised service. Future success requires attracting skilled talent, enhancing existing processes and meeting the increasing demands of customers.

The finance industry is continuously focused on digital transformation and utilising data, analytics and artificial intelligence to improve their services. Banks are applying AI to enhance their current offering, build new products and improve the overall customer service. Data and analytics are proving vital in supporting the progression of new business models and improving decision making.

This significant shift comes with its challenges, such as accessing data, the quality of information, the available skilled talent and the delivery of necessary resources to generate the required results. Most financial teams also lack the required digital experience to create and build a digital-focused organisation. Nevertheless, the decision-making influence of data and analytics provide financial businesses with the competitive edge needed to provide the added value to their customers.

According to studies from McKinsey, Financial businesses that apply data and advanced analytics to engage with customers and drive new business are capable of generating value in several ways:

Enhanced Customer Acquisition: By focusing on delivering personalised information at every step of the customer acquisition journey, engagement becomes simplified and the overall customer experience is improved.

Higher Customer Lifetime Value – Offering new products and services to customers is done through intelligent communication and recommendations based on real-time analytics and data.

Reduced Operational Costs – Automating and simplifying data processes and decision making plans, overall efficiencies are improved and costs decline.

Reduced Risk – Applying advanced analytics enables selective decisions on potential customers and allows detailed analysis of customer behaviours to detect potential cases of risk and fraud.

Financial businesses are increasingly looking for analytical solutions to improve their position against other competitors. According to a report by the Cambridge Centre for Alternative Finance and the World Economic Forum, several global financial services firms have implemented or are working towards adding AI solutions within a range of business functions. Data from the World Economic Forum suggests that approximately 85% of all financial businesses have implemented AI, in some shape or form.

Beyond the security and risk detection side, an increasing number of financial services are applying analytics to create new services and an innovative customer experience. Advanced analytics can be applied across the entire customer journey, from initial engagement through to evaluation and ongoing relationships. As a business uses AI to further deepen its understanding of each customer journey, the organisation can deliver highly personalised offerings directly to the customer in real-time.

Applying data to generate insights that can be applied across the business isn’t enough. Financial businesses that engage continue to increase, experiences are enhanced and loyalty is strengthened. In other words, the ROI on data and AI is not fulfilled until these factors are achieved.