Data is essential for success in the finance market. According to studies, 6 in 10 finance industry leaders believe leveraging data analytics for more insightful information and strategic decision making are top priorities for 2019.
The capabilities to utilise data analytical tools and big data to create an advantage over other competitors is a significant challenge for board members and C-suite directors worldwide.
There are core areas within a business where data analytics can really be applied. In regards to planning, analytics can be used to calculated risk profiling, data testing through simulated studies and statistical sampling. Data analytics can enable the creation of audits to generate rapid and efficient monitoring, keeping a check on patterns to predict cases of risk and potential fraud.
US consultancy Protiviti released its latest Finance Trends Survey based on over 400 finance leaders and professionals. The results indicate that security, privacy and data analysis are the main priorities for finance leaders this year. All three highlighted are connected in some shape or form to data, with improved data analytics representing high-level importance to over 60% responding CFOs.
The study clearly showed the data is a central theme within the financial market and essential tool for creating further commercial insights, increasing sales and enhancing management reporting and decision making. It is also viewed by many finance professionals as a tool for improving financial operations internally, with over half of finance managers viewing data analytics as critical for improving business processes.
In order to efficiently use data analytics and really see the benefit, there are certain factors that need to be in place. Many finance leaders have claimed they are struggling to maintain the quality of data. The quality of the available data will ultimately influence the reporting and analysis generated for a business. Data governance is a critical element and many finance leaders are facing the challenging of ensuring their business has strong and effective data governance in place.
Data quality can also be enhanced through master data management, a process that is both time consuming and costly. Once implemented, however, finance leaders can gather a better understanding of all areas of potential profit and risk within a business. Without creating quality data, the end results from analytics are potentially inaccurate and ineffective for a business. Bearing in mind the continued progression of artificial intelligence and machine learning means data quality will become even more critical for business transformation.
We are in an era of cybersecurity threats and the implementation of GDPR has added further pressure to businesses to protect and manage their data correctly. Keeping information safe is a critical challenge for finance leader. If financial data is mismanaged it can result in significant damage to a business, both from a financial aspect and in terms of reputation. It is no surprise then that security in finance is a top priority for finance leaders, with over 75% of CFOS listing data security as the most important factor to focus on this year.
The challenge is accentuated for larger businesses with a higher turnover as they face a greater volume and complexity with managing their data. As the years go on, data security will only grow in importance. With added data comes further inspections from both customers and regulators and as more companies turn to the cloud, more security risks will be revealed.
Within the study, respondents also highlighted the continuing changing demands of internal customers, managing regulation changes, cloud transitions and tax requirements as other key priorities for 2019.
One particular topic in finance that is gaining a lot of media exposure is robotics process automation (RPA). The study, however, suggested that few finance leaders are really looking to implement this area, with 1 in 5 CFOs believing RPA to be a high priority and over 2 in 5 actually viewing it as a low priority for 2019.
Tony Abel, MD at Protiviti explains that many businesses are yet to really understand the best ways of leveraging RPA. Abel suggests that added expense pressures, combined with demands to become more efficient will likely drive further use of RPA over time to enhance internal processes. RPA can be implemented easily to perform particular repetitive tasks. In terms of finance, the accounts payable section would be a relevant starting area i.e. invoice processing and payment verification.